Around 67 per cent of MSMEs were compelled to shut operations in FY21 due to the pandemic, said Narayan Rane in a Lok Sabha session. This caused a 27 per cent decline in their revenue he added citing a SIDBI survey. Over 50 per cent of the respondent units witnessed a 25 per cent decline in their revenues in 2020-21, he added. The survey was initiated by the Ministry of MSME to gauge the impact of the pandemic on the country’s small businesses. It showed a decline in profitability of around 66 per cent of respondents.

Surveying 1,029 MSMEs across 20 states and two Union territories, the findings revealed that around 65 per cent MSMEs had availed the benefits under the Emergency Credit Line Guarantee Scheme (ECLGS). Further, around 36 per cent had also taken loans under the Credit Guarantee Fund Trust for Micro and Small Enterprises scheme (CGTMSE).

Rajiv Chawla, Chairman, IamSMEofIndia, said, SIDBI’s findings reflect the plight MSMEs faced during the last financial year. He urged the government to help entrepreneurs and micro firms struggling to sustain their operations. The MSME sector employs 40 per cent of the country's workforce, contributes 30 per cent of its GDP, and is responsible for 50 per cent of India’s exports, he added.