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Even as business returns to normalcy, the MSME (micro, small and medium enterprise) segment seeks more temporary support measures in view of persisting challenges in some areas.
“As of now – need purchase category of demand has opened up fully and the biggest cause of fear is that it might taper down from October or November. The luxury purchase or status symbol purchase has started looking up, while purchases from middle- and lower-income group is yet to pick up, according to KE Raghunathan, Convenor, Consortium of Indian Associations (CIA).
CIA conducted a study and survey across India on the reality of the situation with respect to performance of industries and employees especially on financial status, real time issues and the looking up scenario on Q3 and Q4 of 2020-21.
Survey coverage
The study was carried out across India between October 3 and 6, covering individuals earning above ₹25,000 per month, self-employed, owners-driven micro & small units, professionally-driven medium scale industries totalling 17,500 responses.
About 53 per cent of micro and small units indicated that their sales in September were in the 25-75 per cent range of September 2019 level, while 19 per cent reported more than 75 per cent of the previous year’s level and 28 per cent reported less than 25 per cent sales, according to the survey.
More than 75 per cent of September 2019's sales were recorded by 35 per cent in self-employed segment and 28 per cent in medium enterprises category.
Of the five things (finance, orders, staff, raw material and profitability), finance is reported as a major concern by self-employed (80 per cent), micro & small units (54 per cent) and medium enterprises (38 per cent).
In the area of finance, of the five key things (loan repayment, supplier payments, advances to get, overheads and salary), 62 per cent in self-employed, 57 per cent in micro and small segment and 44 per cent in medium units pointed out loan repayment as the major concern.
About 62 per cent of units in self-employed segment, 64 per cent in micro and small units and 68 per cent in medium segment are hoping to do 50-60 per cent of FY2019’s turnover in this fiscal.
Seek urgent action
Raghunathan pointed out that an urgent action must be taken to pay the estimated dues of ₹3,50,000 crore to micro and small units from medium / large Industries, PSU, SPSU, Central/State Governments. Also, governments must spend at least 75 per cent of their budgeted procurements for 2020-21 before December 2020 to boost order book and create employment opportunities in the market.
Other requests included abolishing income tax for this fiscal for who earn less than ₹15 lakh to spur consumption, exemption from GST for sub-₹5 crore turnover units till March 2021, special fast track loans for capital equipment purchase till March 2021 at 5 per cent interest rate and 2-year moratorium and an adhoc limit of 25 per cent of MSME’s monthly turn-over towards bill discounting facility, among others.
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