Union Minister Nitin Gadkari in February last year said that the MSMEs are in the formal and informal sector, so the government and MSME Ministry do not maintain the data on temporary or permanent closure of the units.
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Amid the ongoing COVID-19 pandemic and devastating effect of the second wave, a total of 67 per cent of MSMEs were temporarily closed for a three-month period during the financial year (FY) 2020-21, according to a survey conducted by the Small Industries Development Bank of India (SIDBI) late last year.
Released last month, this survey was assigned by the Ministry of MSME to SIDBI in September 2021 to evaluate the impact of change in micro, small and medium enterprises (MSMEs) classification in 2020 due to the Coronavirus pandemic.
The Union Minister for MSME, Narayan Rane shared the results of the survey in Lok Sabha in reply to a question, on Thursday. Talking about the survey, a total of 1,029 MSMEs across 20 States and two union territories were surveyed by SIDBI
More than 50 per cent of the respondent MSMEs saw a decrease of over 25 per cent in their revenues during FY21. Approximately 66 per cent of units had witnessed a decrease in profitability on account of stable fixed costs and a reduction in revenue, said Rane while citing the survey.
Meanwhile, Congress leader Rahul Gandhi on Monday slammed Prime Minister Narendra Modi led government on the issue of unemployment. Gandhi took to Twitter and wrote, "The unease of doing business. The pain of jobless youth.The compulsive lies of the Modi Government."
According to the survey, approximately 36 per cent had availed loans under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme. Apart from that, about 65 per cent of MSMEs benefited from the Emergency Credit Line Guarantee Scheme (ECLGS).
Talking about the Union Budget as far as the MSME sector is concerned, Executive Chairman and Managing Director at U GRO Capital, Shachindra Nath said, "The extension of ECLGS scheme by Rs. 50,000 up to March 2023, with a special focus on ailing hospitality sector is crucial to facilitate its faster recovery. Credit support has also been provided in the form of Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) revamp with credit of Rs 2 lakh crore for micro and small enterprises."
On a controversial note, the central government had no data and information about the number of MSMEs that were closed or job losses in the sector due to COVID-19.
Union Minister Nitin Gadkari in February last year said that the MSMEs are in the formal and informal sector, so the government and MSME Ministry do not maintain the data on temporary or permanent closure of the units.
Rane in November 2021, also said in Parliament that data about the job loss in the sector is not maintained “as MSMEs are present in both the formal and informal sector."