MSMEs are the backbone of our economy. Covid-19 relief measures can help the Atmanirbhar Bharat dream come true by empowering these MSMEs.
To tackle the economic repercussions of Covid19, India is set on the “Atmanirbhar Bharat” mission. This mission pays special emphasis on the MSMEs.
What’s the first thing that comes to your mind when you hear the term “Atmanirbhar”?
Recently, all the newspapers and news channels featured words like Atmanirbhar, Micro, Small and Medium Enterprises (MSMEs) and the Covid-19 relief measures packages.
Let’s decode them one by one:
The Growing Interconnectedness of the World
All the countries of the world have become interconnected with each other in the last few decades. This is possible due to the rise of affordable air travel, the Internet, and the screening of news, movies, television and other media from one country to another.
However, such hyper-globalization, as economists call it, means that pandemics, such as the current Covid-19, can quickly spread across the hyper-connected world within days. It will also wreak havoc in all the countries of the world together. If the world was less connected, the pandemic could not have spread so rapidly to so many countries.
Is being Atmanirbhar the way forward?
To protect us from the dangers of hyper-globalization, we need to decrease our dependence on imported goods and services as well as increase the consumption of locally produced goods and services.
If all of us follow this principle, it will lead to an ‘Atmanirbhar Bharat.‘ This will insulate us from the risks of hyper-globalization.
What is MSMEs?
MSMEs stands for Micro, Small and Medium Enterprises. It typically means small to medium-sized local establishments like shops, hotels, dairies, factories, cottage industries, etc.
Covid-19 and Businesses
Businesses of all sizes are adversely affected by the pandemic. However, big companies can cope with the adverse effects better due to their size and easier access to capital.
It is the small businesses that will find it difficult to cope with the adverse effects like zero income, lost labor and recurring costs. These firms typically run on credit, might have rented premises, and primarily employed migrant laborers.
Additionally, the proportion of the population employed directly or indirectly in small businesses is enormous. Hence, the government has come up with Covid-19 relief measures for them.
The Covid-19 Relief Measures include:
1. Automatic loan aggregating to a total of INR 3-lakh crore without collateral and with a repayment holiday of 4 months to eligible MSMEs
2. Subordinate debt provision of up to a total of INR 20,000 crore
3. INR 50,000 crore equity infusion support through fund of funds
4. Only local tenders for government procurement up to INR 200 crore
Along with these, the government has offered various other relaxations and provisions.
Furthermore, the government is also encouraging MSMEs to use electronic modes of transactions such as neo banking.
Many such holistic features are available through InstantPay. By using neo banking through InstantPay, MSMEs can analyze their cash flow using virtual financial dashboards. It will help them find out where they can optimize, improvise, reduce expenses, and build new income streams.
We can have a genuinely Atmanirbhar Bharat only if we have Atmanirbhar MSMEs as they are the backbone of our economy. We need to help MSMEs to be Atmanirbhar so that we as a nation can be Atmanirbhar!