MSMEs in India during Lock and Unlock Times

Abstract

The MSME sector in India has emerged as one of the worst affected segments due to COVID-19 pandemic. This chapter – drawing on emerging literature including Government policy documents, reports and insights from survey-based studies – discusses the effectiveness of Government policies and schemes in terms of awareness and access and explores possible coping strategies adopted by the MSMEs towards reviving the sector. Our analysis suggests that the MSME sector has witnessed varying degrees of setbacks and a preponderant majority of MSME units did not get any benefits from wide array of Government schemes and programs. These units adopted various coping strategies including scaling down of business, diversifying product and services; embracing new marketing strategy; rescheduling bank loans; drawing on savings and accessing support from informal sources to revive their operation. This chapter calls for a comprehensive and policy-sensitive database to understand the exact needs and problems of the MSME sector, reframing of Government schemes, capacity building and digital support for facilitating MSMEs access to new and innovative marketing options and strengthening of social welfare schemes.