Around 35 per cent of the country’s Micro, Small and Medium Enterprises (MSMEs) and about 37 per cent of self-employed persons are are on the verge of shutting down operations despite the financial packages announced by the Government of India, as per a survey conducted by the All India Manufacturers’ Organisation (AIMO). The study reveals that the financial stimulus announced by the centre doesn’t qualify start-ups, which account for over 11 per cent of the MSMEs in the country.
The results have been compiled from 46,525 responses that AIMO collected from all around the country across multiple industry segments including self-employed, corporate CEOs, MSME owners, employees and experts.
“The most striking aspect was that 35 per cent of MSMEs and 37 per cent of self-employed respondents said that they see no chance of recovery in their businesses and have begun shutting down operations. To put this in perspective, India has over 130 million self employed and about 65 million MSMEs employing over 150 million people. This kind of mass destruction of business has not been witnessed since our Independence,” said K E Raghunathan, Immediate Past President, AIMO.
As per the reports published by AIMO survey, uncertainty of running a business is about 11 per cent in MSMEs and around 17 per cent in the self employed category.
“The Corporate respondents indicated that while business was affected it, 46 per cent felt may take 3 months to recover while 26 per cent felt they will bounce back by the end of the year , a 6 months period. This sector will not see many closures but will see many people losing jobs, scale down of operation’s, focus on core business and a fine financial balancing act.” said general secretary of AIMO Kenny Ramanand.
Only 6 per cent of corporate and 11 percent of self employed were unaffected by the financial crisis arising out of COVID-19 as they are primarily employed or are involved in the essential sectors.