Issue Details

A STUDY ON IMPACT OF COVID-19 ON MICRO, SMALL AND MEDIUM ENTERPRISES (MSME) IN KAITHAL DISTRICT

ABSTRACT

COVID-19 is hurting nearly all sectors in India, with micro, small, and medium-sized businesses being the hardest hit. Some micro, small, and medium-sized businesses began operations after May 17, 2020 with restrictions and are also experiencing numerous obstacles. This study reveals that the owners concur that MSMEs are unable to pay wages to their employees, MSMEs are unable to meet their immediate capital needs, MSMEs have inadequate liquidity, MSMEs are unable to repay working capital loans, MSMEs are unable to purchase raw materials from suppliers, MSMEs are downsizing their workforce, MSMEs are not receiving the necessary financial support, and MSMEs are suffering from a significant revenue loss. There is a substantial disparity between the impact of covid-19 on micro, small, and mediumsized businesses and their profile. Covid-19 has a negative, significant, and high correlation with the performance of micro, small, and medium-sized firms. Therefore, micro, small, and medium-sized businesses demand substantial financial support from the government and banking sectors because to the covid19 shutdown. To support MSMEs, particularly during the covod-19 outbreak, banks and non-banking financial institutions will give a maximum of 20% of outstanding credit to MSMEs until February 2020. MSME units with a maximum outstanding credit of Rs.25 crore and a turnover of Rs.100 crore are eligible for these loans, which must be repaid over a period of four years with a one-year moratorium on principal payment and for which the government provides a full credit guarantee on interest and principal. Government contributes Rs. 20,000 crore in subordinate debt and Rs. 4,000 crore to CGTMSE, which offers partial credit guarantee support to banks for MSMEs financing. Through a fund of funds, the government allots MSMEs Rs. 50,000 in equity. Within 44 days, central public sector firms and the government release all types of pending MSME payments. These stimulus measures are extremely beneficial for the revitalization and growth of MSME, and the next three to four quarters are crucial for their continued survival and business operations.

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