Pandemic exposed State MSMEs to a bouquet of miseries

Trade bodies need government support without riders so that relief packages become more real, meaningful and inclusive

The pandemic-brought lockdown and an unproductive year was like a violent storm followed by an uneasy calm for about 10 lakh medium, small and micro enterprises (MSMEs) in Karnataka that employ around 60 lakh people. Most of these have seen a total destruction of their supply chain. With revenue streams drying up and labour force returning to their hometowns, they faced a huge cash crunch. Micro enterprises were left to operate at suboptimal levels; many had a hand-to-mouth existence, and were unable to purchase raw materials or pay wages. Meeting overheads/operational costs became a daunting task for most MSMEs as banks refused them credit. But what was worse was that most schemes and relief packages by the Union and State governments came with riders and restrictive clauses. A year after, and cases rising again, Karnataka’s once vibrant MEME ecosystem tells a different story: thousands of micro businesses have gone down the drain, hundreds of small businesses are still fighting for survival while only a small number of medium and large-scale enterprises have managed to survive.