88% of self-employed, SMBs yet to benefit from COVID-19 stimulus, shows survey

A nationwide survey conducted among self employed, micro and small businesses (SMBs) during June 10-15 indicates that 88 per cent of the respondents have not yet availed the benefits of any of the stimulus packages announced by the government.

Conducted by Chennai based Consortium of Indian Associations (CIA) and its 40 partner SMB associations, the survey found that 73 per cent of the SMB respondents did not make any profit during 2020-21. Over 81,000 SMBs participated in the survey. The respondents included manufacturers (49 per cent), service providers (15 per cent), self-employed (14 per cent), and consultants, start-ups, traders, food and hospitality and others. The organisers said the respondents represent 63 million micro, small enterprises (MSEs) and 40 million self-employed individuals in the country.

The survey indicated major job losses among the segment as 59 per cent of the respondents had either reduced, sacked or removed their staff since COVID-19 triggered lockdowns and economic disruptions. Indicating that the situation is far from normal, 42 per cent said they are still unable to decide on retention of employees.

The survey had also sought suggestions from the stakeholders. CIA has compiled a list of long term and short-term measures to be taken by the central and state governments to beat the impact of the lockdown on the SMBs. It has called for a moratorium without interest for all loans up to Rs 2 crore including term loan, working capital loans, credit card liabilities, and personal, vehicle and housing loans of SMBs till the end of the current financial year. The industry body sought additional ECGLS loans upto 40 per cent of the outstanding as on March 31, 2021 for loans less than Rs 5 crore, without insistence on being a standard account as on that date. They want the government to exempt from capital gains any sale of property up to the value of Rs 5 crore, belonging to SMBs, in the company or in promoter name, sold for the purpose of settling the existing loans and/or plough back into business and/or starting a new business venture and/or settling vendors and dues. They also want the tenure of the loan availed through the credit guarantee fund trust for micro and small businesses set by Ministry of MSME, to be increased to 10 years from the current 5 years. Exemption of all Micro Businesses from GST for up to Rs 5 crore turnover was another demand.

A string of suggestions pertaining to pending payment collections, extensions, and relaxations, NPA classifications, refinancing options, opening fair price shops for raw material supplies, ban on exports of steel and cement for six months, fixation of Remission of Duties and Taxes on Export Products urgently and refund to exporters dues since January 2021, etc have been made.

"Over the past year, CIA has provided vital suggestions and modifications required on several initiatives taken by the central and state governments for the benefit of MSMEs. As a result, we realised that a data-backed survey would help consolidate the feedback from this sector, to bring out the pain points and provide solutions and a way forward to revive the sector," KE Raghunathan, convenor of CIA and former national president of All India Manufacturers' Organisation, said.

CIA will submit the findings of the survey to Prime Minister Narendra Modi, Union Minister of Finance Nirmala Sitharaman, Union Minister of MSME Nitin Gadkari, Union Minister of Commerce and Industry Piyush Goyal, and to all state chief ministers, Raghunathan added.

Also read: COVID-19 impact: India's economy likely to contract 12% in Q1 FY22

Also read: COVID-19 impact: 59% small biz likely to scale down, shut shop