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  • Aug 02, 2021
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The Parliamentary panel has termed the stimulus package released by the government to the MSME’s as ‘inadequate’. Comment on the statement by providing suitable suggestions.

Introduction:

The central government had announced stimulus package to various sectors which were greatly affected by the Covid-19 pandemic. The package also included the Micro, Small, Medium Enterprises sector. A parliamentary house panel was setup to review the current situation. The report states that the packages which are announced are inadequate.

Body:

Issues related to MSME’s

 

  • Non availability of funds
  • Lack of working capital
  • Informal nature of business
  • Lack of raw material
  • Supply chain disruptions due to the pandemic
  • Delayed payments
  • Inadequate demand
  • Global slowdown

 

Recommendations of the panel

Importance:

MSME’s are an integral part of Indian economy as they contribute to almost 30% of GDP. Approximately there are 6 crore MSME’s in India which is very volumnous. Around 10 crore Indians work in this sector. MSME’s have contribution of 40% in India’s exports.

Conclusion:

There should be proper strategy to handle these units without which the current issues will continue to hamper the sector irrespective of the packages provided. The reach of the packages should be devised in a way that they are timely and effective. Banks and financial institutions should work efficiently towards this goal.