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071 Bushra Irshad - 240318 - 224008
071 Bushra Irshad - 240318 - 224008
B.Com (Honours)
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CERTIFICATE
RESEARCH GUIDE:
DR. SWAPNA PILLAI
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ACKNOWLEDGEMENT
I would like to take this opportunity to thank Dr. FR. JOHN P.J. (PRINCIPAL)
Of The Bhopal School Of Social Sciences. DR. SMITHA PILLAI (Our research
methodology teacher) to have provided me with such a great opportunity to
work on this research project.
I am indeed thankful to DR SWAPNA PILLAI , my teacher guide for her
constant support and guidance throughout the report work, without which I
could not have completed this work.
I am grateful to all the respondents of the questionnaire for being so much
cooperative and patient to fill the required answer in the questionnaires. The
project would not have been such a success without their contribution.
Last, but not the least, I would like to thank my family, friends and all those
who helped me in some way or the other in the successful completion of this
research project.
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DECLARATION
BUSHRA IRSHAD
B.com (Honors)
3RD Section ‘A
Roll No. 18051039
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INDEX
SR NO. CONTENTS
1 ABSTRACT
2 INTRODUCTION
Rationale of the study
Introduction to the industry.
3 LITERATURE REVIEW
4 RESEARCH METHODOLOGY
Research design
Objectives of the study
Scope of study
Limitations of the study
5 DATA ANALYSIS AND
INTERPRETATION
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ABSTRACT
Pessimism is prevalent everywhere. COVID-19 has been compared to the Great Depression
of the 1930s. Every day, new bottoms of a fall-down in economic activity are being dug up
by analyst and agency surveys. In this hour of crisis, the Indian economy, on the other hand,
has a slightly different storey to tell. The outbreak of the Covid-19 pandemic has hit India's
economy like a tonne of bricks. Before Covid-19 struck, the economy was already in bad
shape. The economy is expected to experience a prolonged recession as a result of the
country's long-term lockdown, the global economic downturn, and the resulting disruption of
demand and supply chains. This paper discusses effect of COVID-19 ) on India's Micro,
Small, and Medium Enterprises, which is one of the vital driver of Indian Economy. MSME's
are the foundation of the economy utilizing more than 11.10 crore laborers in non-farming
exercises across country, and records for about portion of India's fares. On the foundation of
wellbeing crisis, the MSME units are in an upsetting circumstance as seriously obliged
request has gotten their income. The pandemic further worsen bunch of issues to the delicate
MSME area as their liquidity comes from every day interest for their item, and they don't
have enormous money saves. With supportability of MSMEs in question the possibilities of
monetary advancement of India presents an extremely miserable picture considering MSMEs
contribute around 30-35% to the GDP. Visualisation of future existence of Indian MSME is
completely impossible and uncertain at this moment. Their conclusion could prompt a
primary issue in economy while extending the imbalance hole. The point of study is to
evaluate the effect of interest, supply and liquidity stun incurred by Covid on India's delicate
MSME area while proposing recuperation measures to the public authority.
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CHAPTER -1
INTRODUCTION
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INTRODUCTION
On December 31, 2019, WHO received notification of a cluster of pneumonia cases with an
unknown cause in Wuhan, Hubei Province, China. On January 7, Chinese authorities reported
the coronavirus disease (COVID-2019) as the causative virus. As part of the World Health
Organization's (WHO).
The R&D Blueprint has been triggered in response to the outbreak to speed up diagnostics.
On March 11, 2020, the planet was awakened to a perilous reality when the World Health
Organization (WHO) declared novel coronavirus (COVID-19) a pandemic (Sohrabi et al.,
2020; WHO, 2020a). Cases spread quickly from Wuhan, China, to Japan, South Korea,
Europe, and the United States, reaching global proportions. Substantive economic signals are
being sent in the direction of a formal pandemic declaration.WHO has identified a newly
discovered disease (COVID-19) as an infectious virus. Corona virus spreads from person to
person first.when any person who is already sick has a discharge from the nose,Coughs and
sneezes had infected him. As such, it was critical,to defend themselves from this and to take
care of you a virus It was well-informed about COVID -19 and how to deal with it.This virus
must be protected and disseminated.
We are amidst Coronavirus illness 2019 or Covid 19 pandemic that has delivered an
remarkable financial stun and wellbeing stun across the globe. Given the exceptionally
infectious nature of illness, the flare-up of Coronavirus has prompted a plague followed by
expanding number of cases announced in different nations across all landmasses. On January
30, 2020, India reported the first case of the disease. Since then, the number of cases has
steadily risen, and India now has the world's third highest Covid-19 caseload, after the United
States and Russia, with over a million reported cases and over 25,000 deaths. 5
The rate of doubling has gradually increased to about 18-22 days. In light of the episode,
Government of India has made different strategy moves to contain the spread of infection, for
example, upholding social separating and self-disengagement measures, travel boycott and
boundary conclusion, and lockdown of whole country. These actions are pointed levelling the
bend. Furthermore, they likewise purchase at some point time to set up the country's medical
care framework to fight the pandemic at its pinnacle. India, which has a populace of 1.3
billion spends about 1.6% of all out GDP on its medical services foundation,is ill-equipped
with its delicate and worn out medical care facilities. The MSME area is a significant
mainstay of Indian economy and has arisen as quite possibly the most lively piece of Indian
assembling area. MSMEs are spine of Indian economy and go about as
auxiliary units to enormous ventures. They assume a urgent part in financial improvement of
the country through their critical commitments to business age being work escalated
furthermore, monetary strengthening of in reverse territories. They are spread all over
economy and advance comprehensive industrialization in the country. There are about 6.33
crore MSMEs in the country, utilizing about 11.10 crore laborers in non-horticultural
exercises across the country2 Each workmate in MSME area or Manufacturing area truth be
told has multiplier an impact of delivering extra 2-3 positions. Notwithstanding challenges,
MSMEs have made critical commitments to sends out furthermore, financial aspects
improvement of the country and arose as one of the vital drivers of Indian economy over
recent many years.
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RATIONALE OF THE STUDY
The examination plans to make an evaluation of COVID-19 on Indian economy by dissecting
its effect on development, assembling, exchange and miniature, little and medium ventures
(MSME) area, and features key approach measures to control the conceivable aftermath in
the economy. The effect of the pandemic across areas and in various situations of complete,
broadened and incomplete lockdown, and at various degrees of limit use is gigantic on the
Indian economy. India's economy may scarcely figure out how to have a positive
development of 0.5 percent in a hopeful situation yet in addition faces the chance of a 3–7
percent negative development in most pessimistic scenario situations for the schedule year
2020. The effect is serious on exchange, assembling and MSME areas. The probably sway
(deceleration) of COVID-19 from most ideal situation to most noticeably awful situation are
as per the following: fabricating area may contract from 5.5 to 20 percent, trades from 13.7 to
20.8 percent, imports from 17.3 to 25 percent and MSME net worth added (NVA) from 2.1 to
5.7 percent in 2020 over earlier year. The economy is going towards a downturn and the
circumstance requests methodical, very much focused on and forceful financial money
related upgrade measures.
MSME represents Micro, Small and Medium Enterprise (MSME), presented by Government
of India in concurrence with Micro, Small and Medium Enterprises Development (MSMED)
Act, 2006 are substances occupied with the creation, assembling, handling or protection of
merchandise and wares.
MSME area is considered as the foundation of Indian economy that has contributed
considerably in the financial advancement of the country. It produces business openings and
works in the advancement of in reverse and provincial zones. According to the Government's
yearly report 2018-19, there are as of now 6,08,41,245 MSMEs in India. For your agreement
how about we examine a portion of the fundamentals of MSME, including its order,
highlights, job and significance in financial improvement of India.
FEATURES:
Efforts to improve the well-being of artisans and workers
Banks have credit limits or financing assistance.
Via specialised training centres, encourages entrepreneurship and skill growth.
Supports the advancement of technology, infrastructure growth, and modernization.
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National Institute for Micro, Small and Medium Enterprises (NIMSME)
The Indian government, through the Ministry of MSME, has initiated a range of
programmes aimed at encouraging Indian people to be more creative and expanding
established businesses. In this article, we look at some of the ministry of MSME's most
important programmes and schemes.
2. Credit Linked Subsidy Scheme(CLSS) - This plan is intended for those miniature and
little endeavours who find hard to bear the cost of the significant expense in surveying
new and refreshed innovation. By this plan the undertakings will get a sponsorship up
to15 percent on the credit benefited for the upgradation of innovation in the ventures.
This plan discovered to be more useful for the endeavours for improving their
efficiency with the assistance of refreshed innovation.
3. Credit Guarantee Trust Fund for MSEs (CGTMSE) – under this plan credits are
authorized on the premise of assurances gave as far as possible. The insurance free
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attributes are given to both new and existing undertakings through banks and other
monetary establishments
5. The Micro and Small Enterprises Cluster Development Programme (MSE- CDP) was
developed by the ministry to improve the productivity and competitiveness of Micro
and Small Enterprises. This helps businesses develop their technology, skill,
efficiency, and marketability.
6. Fund for the Regeneration of Traditional Industries Scheme – this scheme aims to put
traditional businesses, such as artisans, together to create clusters that will enable
them to remain competitive in the long run. This also entails the establishment of
common facility centres .
7. Financial Assistance to MSME in ZED Certification – This programme aims to
encourage MSME to produce zero defects. This is to raise awareness about the value
of quality in production so that they can increase their production, market scope, and
so on.
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MSME Since most MSMEs basically work on cash, they require prompt liquidity to adapt to
unfavourable occasions. As referenced over, the public authority reported security free
programmed credits to the tune of Rs. 3 lakh crores over the course of the following five
months ensured by the public authority.
As indicated by the public authority, the improvement is Rs. 5.9 lakh crores for MSMEs (3%
of GDP). Be that as it may, the gauges show that the monetary ramifications is just Rs.
16,500 crores (0.08% of GDP). A modest number of firms can really profit by the public
authority declarations. Inventory network disturbances have additionally provoked interest
issue for MSMEs from the bigger firms. A review by All India
Producers Organization (AIMO) says that at any rate 78% of the MSMEs are not happy with
the monetary bundle execution. They are anticipating that the government should give an
option monetary component than simply credits and give a pay boost to their laborers. Firms
likewise recommended alleviation through interest free credits, conceding charge discount,
and diminishing GST pieces. The quick issue is endurance and recuperation in the following
not many months. There are additionally numerous chances for MSMEs in the space emptied
by China. Indian can't become Atmanirbhar without dynamic MSMEs.
COVID-19 has had a massive impact on countries, especially the nationwide lockdowns that
have brought social and economic life to a halt. A environment that was once buzzing with
activity has gone quiet, and all resources have been redirected to reach the never-before-
experienced a crisis. The WHO and the World Bank published a joint study in 2019 that
projected the effects of a pandemic at 2.2 percent to 4.8 percent of global GDP. When we see
the world being consumed by this crisis, the prediction appears to have come true. This
COVID-19 pandemic affected the manufacturing and the services sector—hospitality, tours
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and travels, healthcare, retail, banks, hotels, real estate, education, health, IT, recreation,
media and others. The economic stress has started and will grow rapidly.
The remarkable lockdown has acquired a mess the economy. The lockdown of a country
because of a pandemic seriously compels the interest and supply. A large number of transient
laborers are abandoned in fixed urban areas with no work and pay. As the monetary exercises
are at stop, a huge number of job and organizations are in question. There has been a finished
breakdown of worldwide and homegrown inventory chains with no development of crude
material and completed products due to unexpected conclusion of public and state borders.
The economy is additionally encountering an interest stun as the spending is simply restricted
to fundamental consumptions. The devastating effect of Coronavirus will be on both MSMEs
and bigger firms, anyway the effect will be more evident on the powerless
MSMEs. The Covid-19 pandemic is a seismic pressing factor threating the stockpile chains.
With urban areas fixed all over India and no development across state borders, the creation
exercises and supply chains are at stop. Lockdown assaults homegrown stockpile chains
through two channels:
Cross country lockdown stops all creation exercises, in this way the worth added
creation instantly gets zero with the exception of certain fundamental products.
The lack of data sources will drive serious withdrawals underway. This idle
deficiency of info might be inferable from the calculated hindrances or might be a
chain response of previous.
impact on supply of intermediate goods, supply chain disruption will also have an indirect
impact on IndianMSMEs.Notwithstanding supply stuns, Indian MSMEs additionally need to
handle work stun. The abrupt affirmation of lockdown set off the development of thousands
of traveler workers to their particular town who were stuck in urban areas with no food,
investment funds, sanctuary and occupations. Many are still adhered in urban communities
frantic to return to their towns. The organizations should handle the deficiency of work since
many will lean toward remaining at their towns with their families. The climate of
vulnerability has started a dread of returning to work among laborers. Furthermore, MSME
area works distinctively and significantly depends every day interest of its customer. With
individuals remaining at home there is an end in income of MSME area, which need more
liquidity to bring about their working expenses. . Wages of labourers account for a significant
portion of their operating costs. Because of the existence of production processes, which
involve physical presence of labour at the units, a change in work process by a transition to
work from home is not feasible for MSMEs. As a result, the units are compelled to pay,
salaries to their employees in times of near-zero labour utilisation and cash shortages
Notwithstanding supply stuns, Indian MSMEs additionally need to handle work stun. The
abrupt affirmation of lockdown set off the development of thousands of traveler workers to
their particular town who were stuck in urban areas with no food, investment funds, sanctuary
and occupations. Many are still adhered in urban communities frantic to return to their towns.
The organizations should handle the deficiency of work since many will lean toward
remaining at their towns with their families. The climate of vulnerability has started a dread
of returning to work among laborers. Furthermore, MSME area works distinctively and
significantly depends every day interest of its customer. With individuals remaining at home
there is an end in income of MSME area, which need more liquidity to bring about their
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working expensesAccording to a study, the decline in labor supply triggered by Spanish flu in
1918 raised wages and prices of goods and services by 5%7.
On Demand side, the purchasers are compelled to remain at home which has caused and
interest stagnation in the economy. in the midst of vulnerability the purchaser expects the
most noticeably awful result and afterward takes his choice dependent on this
suspicion. The utilization is simply restricted to fundamental merchandise with no use on
unimportant labor and products. This conduct isn't transient and will win in economy for a
significant timeframe particularly on account of unimportant products for example one of key
driver of total interest. The pandemic comes at the absolute worst second as the nation's
financial climate was brimming with pressures. As the development possibilities were
questionable, the economy was projecting a potential downturn. Nonetheless, the unexpected
stop of monetary exercises in the wake of Coronavirus pandemic clarifies that the Indian
economy is currently bound to observe an unavoidable .
Downturn. This time, however, the virus will determine the severity of India's recession.
Although the corona virus is paving the way for a recession, it is also preventing new job
lows. Salary reductions and layoffs would result in a general drop in company and consumer
trust. The customers will be pleased.
As a result, they would have less disposable income, which will have a negative effect on
demand. Furthermore, the negative effects of the manufacturing sector lockout and supply
shock will have ripple effects on investment, jobs, and wages, both of which will sharply
slow demand. As a result of the slow demand, price levels will plummet, which will lead to a
decrease in supply, all while adhering to basic economic principles. The culmination of these
intertwined shocks is a push. These interconnected shocks are ultimately pushing
economy into a downward spiral while souring the market of vulnerable MSMEs. The crown
set off request shockwaves are endless and go past the domain homegrown request. It will
normally spread and contaminate the worldwide interest situation. The Covid is additionally a
worldwide interest stun, fall in imports of different economies will be significantly upsetting
to trades receipts of India. The decrease in worldwide exchange will contrarily affect the
universally uncovered Indian MSMEs. Sending out MSMEs are more affected than Non-
trading MSMEs; are vulnerable to both disturbance in store network and loss of worldwide
business sectors. According to Directorate General of , Business Information and Statistics,
the portion of MSMEs in complete fares from India straightforwardly furthermore, by
implication is 48.10% FY 2018-19, almost 50% of India's exports8
The MSMEs send out industry is worth INR 6 Lakh crore. Sending out MSMEs which
represent 35 % of pearls/diamonds/ gems/Metals, 8% of electrical and hardware gear, 11% of
articles of clothes and 40% of different fares will end up in unstable circumstance with the
breakdown of the worldwide interest for their products. s India is key player in global generic
medicines supply. In the meantime, exporting MSMEs will be under immense stress
conscious of their weak financial position. Their capacity to continue their operations is
diminishing and their market is deteriorating day by day.
Miniature, Small and Medium endeavours, which have made more than 90% of the positions
in India, utilizing more than 114 million individuals and contributing 30% of the GDP
(Radhika Pandey, 2020), are at the danger of having an extreme money crunch if the
lockdown is reached out to about two months. Large numbers of these MSMEs have credit
commitments and month to month EMIs to pay. Large numbers of them may very well
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vanish if their money cycle is upset as a result of the lockdown, with fixed costs hanging over
them in such a circumstance. They need a ban for credit reimbursements. The Reserve Bank
of India has issued funds to non-banking financial companies, some of which lend to SMEs.
Furthermore, the transport of perishable goods is disrupted, resulting in significant losses for
these companies. Without a thriving MSME market, India will be unable to achieve real and
long-term prosperity.
The COVID-19 crisis would also put Indian start-ups to the test. Start-ups must rely on cross-
border fundraising to survive. Several entrepreneurs are seeing their companies come to a
halt. Receivables are spiralling out of control, forcing them to take painful cost-cutting steps
in their businesses. Because of the restricted global capital flows, the government would have
to make funds available to this sector. Venture capital firms may take a little longer to come
and help this sector.
MARKET DEMAND
Owing to a stagnant economy and decreased retail demand, consumer demand trends
have shifted; supply chains have been disrupted and are under strain. Fundamental
shifts in consumer behaviour and market access have thrown MSMEs off balance in
the state as a result of the COVID-19 crisis.
LOGISTICS
Because of lockdown, the production network has basically halted. Thus, shipments
lie forthcoming as plants and distribution centres were closed in a brief reaction to the
worldwide wellbeing crisis. The emergency has seriously influenced transport
administrations, both as far as market interest. Furthermore, in light of the fact that
cargo transport tasks, coordinations, and the creation of merchandise were so firmly
synchronized, these disturbances have immediately had a expanding influence on
trade, uncovering the delicacy of the whole production network.
EXPORT ISSUES
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Product sends out have imploded by more than 60% and imports contracted just
marginally less. The exchange breakdown was to be expected as the spate of
territorial, public just as lockdowns all throughout the planet have gouged request and
speculation, yet in addition seriously upset stock chains and delivery courses.
SHORTAGE OF FUNDS
The MSMEs gaze at an absence of capital. Little endeavours are hit by zero income
due to the public lockdown. As there was an end in the creation and droop popular,
MSMEs can't pay their leasers. While the income age stays on hold, there are a few
costs that the MSMEs can't get their hands off, for example, pay rates of workers,
charge store, lease of stockrooms and office spaces, among numerous others.
TEMPORARY SHUTDOWN
Working environment closure has been a main consideration in hitting MSMEs hard
during the COVID emergency as tasks get stopped because of inaccessibility of crude
materials and leave the ventures at a high danger of indebtedness. Thus, it is
characteristic that the lull or the brief closure is one of the central point that have
influenced the MSMEs in North Odisha.
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As confirmed, the motivation behind why the Indian MSME area neglected to endure the
danger of COVID-19 pandemic was that the Indian Government declared the cross country
lockdown inside a notification of short enough said. The MSME area was classified as
generally helpless against COVID-19 pandemic since laborers don't have the ability to tackle
the extraordinary emergency. Moreover, independent company ventures that involved the
MSME area in India endured huge misfortunes because of the lockdown since they needed to
run their customary business activities with just a modest bunch of workers. They lacked
management skills and had to deal with minimal financial resources to keep the company
running.The lockdown, on the other hand, exacerbated the difficulties that business
entrepreneurs in India's MSME sector were experiencing.
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also, extraordinary obligation of Rs. 25 crore were qualified for award of the guarantee free
credit. Notwithstanding, preceding a declaration of designation of the credits, the Indian
MSME area had encountered significant issues due to baseless rivalry by global unfamiliar
organizations working in India.
In accordance with the worldwide reaction, the Government of India sliced loan fees,
expanded cutoff points on Non-Performing Assets (NPAs) to forestall setting off
indebtedness, and offered instalments from the public a lot of Employee Provident Fund
(EPF) to stay away from cutbacks. A few driving banks have reported specific reason credits
at diminished rates for up to 10-20% of the organizations' functioning capital cutoff.
While these strategy measures are empowering, they are one-sided towards the bigger, and
more formal/coordinated firms. Nonetheless, the actions are lacking for the more modest,
casual/disorderly firms, which structure a dominant part of India's modern scene. As per the
Economic Census information, more than 95% of firms (more than 55 million firms) utilized
less than five specialists, and 94% were not enlisted with the public authority. Hence, it is far-
fetched that these little firms add to EPF and may not profit by the Government's
commitment to EPFO.
Furthermore, over 81% MSMEs are self-financed with just around 7% getting from formal
foundations and government sources (Economic Census, 2013). Credit market mediations
(less expensive advances, expanded cutoff points on NPAs) subsequently may not profit this
area straightforwardly. Since most MSMEs fundamentally work on cash, they require quick
liquidity to adapt to unfavourable occasions. Besides, numerous miniature endeavours are
little, family run organizations.
Given that different areas of the economy and specifically, occasional movement and
agribusiness, are seriously hit by the lockdown, permitting these miniature undertakings to
work easily could significantly help families adapt to this financial stun. Subsequently, more
straightforward proportions of liquidity might be the need of great importance, like the
activity of the Confederation of Indian Industries (CII) that sets up an asset focused on
straightforwardly at facilitating the liquidity imperatives of MSMEs. Finally, MSMEs are
spatially concentrated, with about 30% of MSMEs based in Uttar Pradesh and West Bengal,
and about 75% of MSMEs based in ten states. As a result, both the state and the federal
governments must work together. Supply-side measures, such as improving MSMEs' supply
chains, can also aid them in weathering the storm.
Guaranteeing that the MSME area approaches crude materials and strong downstream stock
chains would not just assistance moderate creation deficiencies in the wellbeing what's more,
the fundamental products area, however given its size, additionally conceivably log jam the
unfriendly effect on the Indian economy in general. The Government of India has effectively
engaged MSMEs delivering clinical and other fundamental items to enrol and sell in the
Government's e-commercial centre. This ought to be extended to different areas too with co-
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appointment across various states to fulfill neighbourhood supply and need prerequisites.
While Indian policymakers face the extreme assignment of containing a general wellbeing
pandemic just as defining quick approaches to shield the most powerless from its unfriendly
financial impact, a submitted reaction to help the MSMEs is fundamental, inescapable and
key to facilitating the effect of Being out of the conventional organization, they don't need to
look after accounts, make good on charges or hold fast to administrative standards and so on
This cuts down their expenses.
Changing the MSME definition: The low threshold limit in the MSME definition has caused
fear, and they have not expanded their company because they believe that if they do, they will
lose their eligibility for MSME benefits. After a long period of anticipation, the government
has revised the MSME concept.
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EQUITY INFUSION THROUGH FUND OF FUND:
Accessing of account is continually being a major hurdle for MSME. To defeat this issue Rs
50000 crore value imbuement for MSME has been arranged through asset of asset. Asset of
Fund with corpus of Rs 10000 crores will be set up. It will help to grow
MSME size just as limit and will urge MSMEs to get recorded on main leading body of stock
trade.
2500 CRORE EPF SUPPORT FOR BUSINESS AND WORKERS FOR 3 MORE
MONTHS:
Under Pradhan MantriGarib Kalyan Package (PMGKP), instalment of 12% of manager and
12% employee contributions was made into EPF accounts before for compensation long
stretches of March, April and May2020. This help will be reached out by an additional 3
months to compensation long periods of June, July andAugust 2020
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POLICY RECOMMENDATIONS
Given India's poor fiscal position, the government must help businesses open as soon as
possible and in stages. Supportive policies must take into account demand, supply, and labour
shocks, and they must be customised to the specific challenges that each country faces.
MSMEs are small and medium-sized businesses. However, the policy structure that supports
it might think about implementing the recommendations.
1. Compensation backing can be given to work escalated MSME units to boost them to hold
their representatives and to stay away from giant number of cutbacks by firms. The public
authority can offer to pay a piece of wages to the workers which will alleviate the monetarily
burdened MSMEs from colossal responsibility. Moreover, such compensation support
strategy will likewise give fundamental pay backing to workers in such exceptional
occasions. The compensation/wages of distinguished beneficiaries could be straightforwardly
moved to their Jan Dhan accounts.
2. While tending to the liquidity crunch, the public authority ought to urge banks to increment
portion of loaning to MSME area with level financing costs that would let loose their
consideration from liquidity deficiencies with the goal that they could zero in on their centre
business. Moreover, they should be offered postponement from instalments like power
charges, water charges, local charge and so forth Likewise, they should be permitted to
concede from credit instalment with no punishment until the request of economy is fairly
reestablished and instalment pattern of economy is in the groove again.
The most noticeably terrible hit MSMEs associated with fares could be given an expense
occasion and medium to long haul credit with 4-6% loan cost.
3. Import duties should be reduced by the government to protect MSMEs from the rising
costs of imported inputs. In addition, the Indian government should take policy steps at
international forums such as the G20 to resolve the global trade slowdown.
collective action and communication.In such uncommon occasions, the approach backing
ought to be all around focused given the restricted boost sum. Be that as it may, as of now the
public authority has no precise information on MSMEs depends on Fourth MSME statistics
directed in 2006-07. In future before any drawn out approach plan, the government should
lead the statistics of MSME since the public authority has changed the meaning of MSMEs
dependent on ventures level as of late while announcing the subsequent upgrade bundle. A
precise information on MSMEs is perquisite for clear cut approach plan and well directed
arrangement execution to catalyse the recuperation of spine of the economy.
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CHAPTER-2
LITERATURE REVIEW
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LITERATURE REVIEWS:
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should sustain them very much like a bird takes care of an infant bird as the economy limps
back to routineness. In the end, actually like sustained infant birds these MSMEs will spread
their wings and fly while driving the Indian economy towards new highs of development rate.
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Moreover, private ventures in India encountered an extreme compression in business because
of a negative development pace of net deals. It was examined that the system of giving
offices of credit would empower business people to embrace the most recent innovation, for
example, internet business. Plausible proposals included dispensing of credit ensure plans,
arrangement of sponsorships and expansion of residency of reimbursement of advances.
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The continuous COVID-19 pandemic has caused the Micro Small and Medium Enterprise
(MSME) area to confront uncommon difficulties since this area have a lot of lower stores of
liquidity and less admittance to credit. The cross country lock down since 24th March 2020 is
subsequently, unquestionably bound to crush the spirit of MSME area. In any case, according
to the study report we can presume that the MSME area of North Odisha end up being tough
enough &stood tall against the difficulties looked by the pandemic and has been influenced
less significantly as lion's share of the members doesn't have the danger of perpetual
conclusion of their business. The main consideration that has influenced the
business of the MSME area is impermanent closure of their undertakings, at last influencing
the incomes. Numerous undertakings have required their business extension and development
intend to be postponed to better plan and many have discovered imaginative strategies for
differentiating into new business exercises to adapt to the emergency. An enormous number
of respondents are confident that diminishing the creation of labor and products as their
present activity plan will assist them with defeating the emergency. In spite of the fact that
the Government has taken different activities to assist the MSMEs to adapt to the emergency
it is discovered that practically 50% of the respondents don't know about it and lion's share of
the members have not yet benefited the plans. This implies less reliance of the venture on the
Government, a way of thinking, which NOCCi has faith in. Countless taking an interest
undertakings discovered the plans declared by the Government under "ATMANIRBHAR
BHARAT" for MSME area valuable even without profiting the equivalent, furthermore, have
exceptionally liked the insurance free programmed credits and changed meaning of MSMEs
plans.
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THE ECONOMIC TIMES ( JUNE 2019 ) SAYS:
" Union Minister Nitin Gadkari on Friday invited the declarations for MSMEs in the Budget
and said his service has chosen to raise the area's commitment to 50% of the country's GDP
in the following a long time from 29% as of now and give occupations to 15 crore
individuals. "The claim to fame of this Budget is that our limited scale and medium-scale
ventures have gotten greatest support. MSMEs have a commitment of 29% in our nation's
GDP and the office has concluded that we will build the commitment to 50 percent of the
GDP," said Gadkari, Union Minister for MSME and Road, Transport and Highways."
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CHAPTER -3
RESEARCH
METHODOLOGY
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WHAT IS RESEARCH METHODOLOGY?
Research methodology is the way through which analysts need to direct their exploration. It
shows the way through which these scientists detail their concern and level headed and
present their outcome from the information got during the examination time frame. This
exploration plan and approach section additionally shows how the examination result toward
the end will be acquired in accordance with meeting the target of the investigation. This
section subsequently examines the exploration strategies that were utilized during the
examination interaction. It incorporates the exploration procedure of the examination from
the exploration methodology to the outcome scattering. For accentuation, in this section, the
creator diagrams the examination system, research configuration, research technique, the
investigation region, information sources, for example, essential information sources and
auxiliary information, populace thought and test size assurance, for example, surveys test size
assurance and work environment site openness estimation test assurance, information
assortment strategies like essential information assortment strategies including work
environment site perception information assortment and information assortment through
work area audit, information assortment through polls, information got from specialists
assessment, working environment site openness estimation, information assortment devices
pretest, optional information assortment strategies, strategies for information investigation
utilized like quantitative information investigation and subjective information investigation,
information examination programming, the dependability and legitimacy investigation of the
quantitative information, unwavering quality of information, unwavering quality
examination, legitimacy, information quality administration, incorporation standards, moral
thought and scattering of result and its usage draws near. To fulfill the targets of the
investigation, a subjective and quantitative exploration strategy is caught by and large. The
investigation utilized these blended methodologies in light of the fact that the information
were acquired from all parts of the information source during the examination time.
Accordingly, the reason for this procedure is to fulfill the examination plan and target
conceived by the scientist.
RESEARCH DESIGN
The current research uses secondary data to determine the effect of COVID-19 on the Indian
economy with reference to MICRO SMALL AND MEDIUM ENTERPRISES (MSME). The
data comes from National Account Statistics reports, a ministry of statistics and programme
implementation (MOSPI) publication; the Reserve Bank of India's Handbook of Statistics on
Indian Economy and Monthly Bulletin; and the Ministry of Commerce's Export–Import
Database. Secondary data is used to gather information from different optional sources. Data
was collected from many different publicly available sources which consisted of information
of death counts and confirmed cases and how it is affecting their economy(of different
countries). This incorporates reports and undertaking archives at each assembling areas (more
on medium and huge level). Auxiliary information sources have been acquired from literary
works with respect to OSH, and the leftover information were from the organizations'
manuals, reports, and some administration records which were incorporated under the work
area audit. Legitimate diaries, books, various articles, periodicals, procedures, magazines,
pamphlets, papers, sites, and different sources were considered on the assembling modern
areas. The information additionally got from the current working archives, manuals,
techniques, reports, factual information, strategies, guidelines, and principles were considered
for the research.
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By and large, for this exploration study, the work area survey has been finished to this end,
and it had been cleaned and adjusted upon manuals and archives acquired from the chose
organizations.
1. This research focuses on the COVID-19 problems faces by MSME sector in India
2. Mostly all the sectors of the Indian economy were impacted by the COVID-19
pandemic.
3. The economic downturn has begun and is expected to worsen rapidly.
4. We welcome submissions in all of these fields, and we plan to cover MSME sector of
INDIA.
Our analysis has some flaws that can be exploited in future studies:
1. To begin with, this study can only be considered preliminary, and further follow-up
tracing investigations at various stages are needed to track the pandemic’s ongoing
effects.
2. More surveys should be conducted to determine the effect of COVID-19 on other
cultural, social, and governmental structures.
3. The source of data collection is secondary data, Secondary data may be broad and
ambiguous. It is possible that the details and data are not right.
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4. The information may be outdated.
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CHAPTER – 4
INTERPRETATION
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At current prices, MSMEs make a significant contribution to the country's economy.
TABLE 1:
Source: Central Statistics Office (CSO), Ministry of Statistics & Program Implementation.
INTERPRETATION:
The National Board for Micro, Small and Medium Enterprises (NBMSME) was founded by
the Government of India under the Micro, Small and Medium Enterprises Development Act,
2006, to investigate the factors affecting MSME promotion and development. This board also
examines current policies and makes recommendations to the government to help the MSME
sector expand.
INTERPRETATION :
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Following the implementation of the MSMED Act, the Indian economy has seen a
considerable increase in the number of businesses and jobs created, as well as a contribution
to the country's GDP growth.
As shown in the table, the number of MSME units increased from 361.76 lakhs to 510.57
lakhs over a ten-year period, representing nearly a hundred percent growth. We may deduce
from the table that MSME-generated job opportunities have increased by more than 50% in
the last ten years.
FIGURE 1:
FIGURE 2 :
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FIGURE 3:
INTERPRETATION:
In the figure, size of air pocket(bubble) mirrors the size of middle of the road merchandise
import and the thickness of bolts addresses volume of two-sided exchange streams. Little
exchange streams are avoided for clearness. China, the focal point of Covid is additionally
the focal point of stream of halfway merchandise.
China is viewed as workshop of the world assume a significant part in organization of
worldwide exchange and creation. For Indian MSMEs with no different other options, China
is a significant and sole provider of certain fundamental Industrial information sources and
segments. MSMEs will be hard-hit by deficiency of crude material and their taking off costs.
They will think that its harder to procure imported essential mechanical contributions because
of port limitation and vessel requirements. Also, the deteriorating conversion standard will
further make then costly and add to their expense. Furthermore, supply chain instability
would have an indirect effect on Indian MSMEs, in addition to the direct impact on
intermediate goods supply. For example, China could export an electrical part to Japan,
which could be a valuable commodity.crucial part for the manufacture of an electrical
system, which is imported at the end of the supply chain by an Indian MSME manufacturing
a consumer durable product. The longer the crisis last, the more difficult it will be for global
supply chain network to bounce back.
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FIGURE 4:
INTERPRETATION:
Among Covid-19 nations, USA, China, Singapore, Hong Kong and UAE are significant fare
objections for India. The worth of fares to these nations is considerable, generally about 38%
of all out trades income. All things considered, these nations are on various lockdown stages
which has prompted a worldwide interest lull which will close down one of development
motor of Indian economy for example trades and debilitate the foundation of Indian economy
supporting fares for example MSMEs.
FIGURE 5:
INTERPRETATION:
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It is clear from the figure that the GVA of MSME area has developed with more than 7%
during 2015–2017 and taking the triennium normal completion in FY 17, the MSME area
would have developed with the rate 6.74 percent in the typical case situation. Nonetheless,
with the COVID-19, the development can boil down to the degree of 3.14 under no doubt
situation B, and can go further lower to 1.7 percent in the event of cynical situation.
FIGURE 6:
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FIGURE 7:
Share of employment (in lakhs) in rural and urban MSME sector:
INTERPRETATION:
In the rural manufacturing MSME market, there are 186.56 lakh people working, as shown in
Figure.
The urban MSME sector employs 173.86 lakh people. In 2019, the population involved in
trading services in the MSME sector in rural India was 160.64 lakhs, while the population
involved in trading services in the urban MSME sector was 224.54 lakhs.
FIGURE 8:
INTERPRETATION:
73% businesses reported a decrease in customer footfall
FIGURE 9:
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INTERPRETATION:
Nearly half the enterprises reported a decrease in volume of supplies.
FIGURE 10:
INTERPRETATION:
Enterprises that reported a decrease in volume of supplies; the decrease is of a median value
of 40%.
“My shop is open and business is running, but the footfall has gone down
drastically. Everyone is afraid that the police will beat them up if they step out
during the lockdown. Only those who desperately need medicines visit my
shop.” – a medical shop owner from a rural area
“Sales are down by more than 75% since last month. Retailers are demanding
tea but I am unable to supply to them as transport options are not available.” - a
female tea distributor from a semi-urban area
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INCOME HAS BEEN HARMED AS A RESULT OF DISRUPTED
SUPPLY CHAINS.
The costs of doing business have remained relatively unchanged. However, an increase in
transportation prices for about a third of the businesses suggests that there will be disruptions
in the market the supply chain.
FIGURE 11:
INTERPRETATION:
37% of enterprises reported an increase in transportation costs by a median of 20%
FIGURE 12:
INTERPRETATION:
Changes in supply distribution after COVID 19: 77 percent of businesses must go pick up all
of their supplies.
FIGURE 13:
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INTERPRETATION:
3/4 of the businesses announced a drop in revenue.
Female-owned businesses were more likely to experience a decline in profits. 82 percent of
female-owned businesses registered a drop in revenue, compared to 72 percent of male-
owned businesses men's property
FIGURE 14:
INTERPRETATION:
Nearly half of the businesses showed an increase in revenue per customer as a result of bulk
buying: a median 40% increase for urban businesses and a 20% increase for rural businesses.
15% for semi-urban businesses, and 15% for rural businesses.In rural, semi-urban, and urban
areas, however, consumer footfall has declined for all businesses.
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“Some of my customers have started buying in bulk now to
stock up during the lockdown period.” - a tobacco and snacks
trader based in an urban area
FIGURE 15:
INTERPRETATION :
While 74 percent of businesses said they were in the same position as before when it came to
getting credit from suppliers, 25% said they were having difficulties. Qualitative data
suggests that receivables from customers are frozen on the one hand and customers have
stopped advance orders on the other hand.
FIGURE 16:
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INTERPRETATION:
A rise in the cost of supplies was recorded by 43% of businesses. Businesses that recorded an
increase in supply costs also reported a median 50 percent drop in revenue.
FIGURE 17:
INTERPRETATION:
One-fourth of the businesses polled said their household expenses had increased.
FIGURE 18:
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INTERPRETATION:
Businesses that registered an increase in household expenditures, with a median increase of
23 percent.
FIGURE 19:
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INTERPRETATION:
Around one-fourth of the respondent entrepreneurs have started selling new
products and services to cope with the crisis.
FIGURE 20:
INTERPRETATION:
Around 26% enterprises :reported a reduction in staff to almost zero
To maintain cash flow, a few MSMEs have increased the price of products
and limited credit sales.
FIGURE 21:
INTERPRETATION
46% of enterprises reported an increase
in price of goods sold
FIGURE 22:
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INTERPRETATION:
14% of enterprises reported a decrease in credit to customers.
FIGURE 23:
INTERPRETATION:
Almost a third of businesses have begun to interact and accept business orders through social
media platforms such as WhatsApp and Facebook.
FIGURE 24:
INTERPRETATION:
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More than half of the respondents have increased the usage of digital payments. The
pandemic has prompted a surge in the use of digital payments in both urban and rural areas.
About 60% of those polled said the percentage of people who smoke has decreased.
Transactions in cash
However, the majority of business owners continue to accept cash.
This is either to retain liquidity or to meet the demand for cash transactions from customers.
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CHAPTER-5
RESULTS AND
DISCUSSIONS
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MAJOR FINDINGS
Corona infection (Covid19) is one the monster calamity in the year 2020. Pneumonia
of obscure cause-was distinguished first time in Wuhan city Hubei area of China on
31.12.19. From 31.12.2019 to3.01.2020 absolute number of 44 individuals influenced
with pneumonia of obscure reason was found.
Very nearly 210 nations and regions around the world have detailed a sum of
44,42,414 affirmed instances of Covid and a loss of life of 2,98,322
India is a developing nation. After China, India's Micro, Small and Medium
Enterprises (MSME) have the largest market share in the world. MSME plays an
important role in accelerating the development of the Indian economy. However,
MSME's status will be unimaginable and volatile in the aftermath of this epidemic.
The state of Uttar Pradesh has the highest number of estimated MSME, accounting for
14.20 percent of all MSME in the world. West Bengal is a near second with 14
percent, followed by Tamil Nadu and Maharashtra, both with 8%.
In India there are more than 63 million MSME units in India. The Indian MSME will
be impacted essentially because of the flare-up of Covid19 in not so distant future
MSME area in India will deal with the issue like low liquidity or income and need of
workforce since every day bets have gone to their towns. Absence of labor force
should be a negative effect on creation.
Lower creation implies lower supply and lower supply will create the swelling climate
Since most small business transactions in India are done in cash, and payments to
employees and labourers are often made in cash, the effect of the lockdown would be
very uncomfortable for Indian MSME.
19% to 43% of the MSMEmay vanish if pandemic continue 4 or two months. MSMEs
have gone through most troublesome time in-the most recent 3 years (All India
Manufacturing Organization).
The significant worry for MSME will be liquidity smash due to thecovid-19 flare-up.
Absence of liquidity will disturb store network and work accessibility. Numerous unit
shave settled up on their laborers' wages for March completely and are ready for April
instalment while there-is no income now. Moreover there are charges like power
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charge, water charge that likewise need to be-paid yet without income or considerable
government support, it is extremely unlikely they can carry on inMay and past.
Delays in the introduction of new products, failure to satisfy demand from critical
industries, and difficult social distancing are all major concerns for MSME units. The
State Bank of India has set a target of distributing 700 crore to Mumbai's MSME
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CONCLUSION
Almost every nation on the planet is being impacted by the catastrophic Covid-19 outbreak.
The world's most strong economies have become powerless, and the situation has become
uncontrollable. However, India's ability to bounce back by making fast and timely decisions
is truly commendable. Covid-19 has a destructive effect that we must not forget.
It very well may be derived that the cross country .lockdown prompted disintegration of the
business possibilities of business visionaries of the MSME area in India. The scientist
inferred that non-dispensing of help measures influenced creation of both fundamental and
unimportant products. Besides, there was a slow spike in the measure of misfortunes caused
by little and medium business ventures because of nonavailability of help measures. Be that
as it may, it was shown that the Indian Government made strides from that point, and
dispensed programmed credit worth Rs. 3 lakh crore against no guarantee. It was derived that
the declaration of cross country lockdown stifled the Indian MSME area in light of the fact
that a larger part of firms were close down forever. There were no elective alternatives at all
as monetary assets were lessening labor force and labourers got back to the places where they
grew up. Nonetheless, the specialists who remained needed administrative skill to handle
emergency. The concentrate along these lines proposed healing measures such as stream of
money liquidity and assessment help for shielding the interests of business people of MSMEs
during the COVID-19 pandemic. Notwithstanding being deadly to the Indian economy, the
Covid gaps the chance for India to arise as a Global Manufacturing Hub while understanding
its Make in India strategy in evident sense. India can benefit from the adjustment of
worldwide viewpoint of China's assembling area following the episode of Covid, and become
known as an elective assembling objective while bit by bit slicing spillages to China through
accomplishing independence in assembling of sources of info. India ought to endeavour to
accomplish independence underway of contributions to similar style as India advanced to
accomplish independence in food grain creation during the underlying five-year plans.
This should be possible through distinguishing the imported data sources and working with
the foundation of MSME units of such segments. The development possibilities of MSMEs
are high and they have the limit of driving India out of downturn gave the public authority
should sustain them actually like a bird takes care of an infant bird as the economy limps
back to routineness. Ultimately, actually like supported infant birds these MSMEs will spread
their wings and fly while driving the Indian economy towards new highs of development rate.
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