Covid impact: 43% MSMEs paid partial salaries, 11% no salaries

More than 53 per cent of micro, small and medium enterprises (MSMEs) either did not pay salaries in full or didn’t pay at all to their employees because of the Covid-19 pandemic, reveal the studies conducted by government bodies.

The studies were conducted by National Small Industries Corporation (NSIC) and Khadi and Village Industries Commission (KVIC) to assess the impact of Covid-19 pandemic on MSMEs, including units set up under Prime Minister’s Employment Generation Programme (PMEGP), said an official press release.

The main findings of the online study conducted by NSIC to understand the operational capabilities and difficulties faced by the beneficiaries of NSIC schemes amid Covid-19 pandemic are as follows:

i. 91 per cent MSMEs were found to be functional.

ii. Five most critical problems faced by MSMEs were identified as liquidity (55 per cent units), fresh orders (17 per cent units), labor (9 per cent units), logistics (12 per cent units), and availability of raw material (8 per cent units.)

The findings of the study conducted by KVIC are as under:

i. 88 per cent of the beneficiaries of PMEGP scheme reported that they were negatively affected due to Covid-19, while the remaining 12 per cent stated that they were benefitted during Covid-19 Pandemic.

ii. Among the 88 per cent who were adversely affected, 57 per cent stated that their units were shut down for some time during this period, while 30 per cent reported drop in production and revenue.

iii. Among the 12 per cent who had benefitted, 65 per cent stated that their business increased as they had units in retail and health sector and around 25 per cent stated that their units benefitted as they were dealing with essential commodities or services.

iv. On the question of regular payment of salaries to the employees, around 46.6 per cent respondents stated that they had paid the salaries in full, 42.54 per cent reported to have partially paid and 10.86 per cent reported to have not paid salary for some time during this period.

v. A majority of the beneficiaries expressed the need for additional financial support, relaxation of waiver of interest and marketing support for their products.

This information was given by MSME Minister Narayan Rane in a written reply in Rajya Sabha today.