SIDBI survey shows over 50% MSMEs suffered decline in revenue by more than 25%

MSME Minister Narayan Rane shared the results of a 2021 SIDBI survey in the Lok Sabha last week that showed that 67% MSMEs had to be temporarily closed for up to three months when Covid first struck in 2020.

Financial Express reported that according to the survey, more than half of the MSMEs saw a decrease in their revenue by more than 25%. “Around 66% reported a decline in profitability on account of stable fixed costs and a decline in revenue,” said a report in FE. 65% MSMEs had to use the Emergency Credit Line Guarantee Scheme. 36% were forced to take loans under the Credit Guarantee Fund Trust for Micro and Small Enterprises Scheme.

Though in 2020, the government had redefined MSMEs to support more businesses under its ambit during the pandemic, the government reportedly had no data about the losses incurred by the sector, unemployment, or even how many businesses had to be shut down. Financial Express reported that last February, Nitin Gadkari, who was then MSME Minister, told the Rajya Sabha “as MSMEs are there in both formal and informal sector, data regarding temporary or permanent closure of the units are not maintained by the Government of India in Ministry of Micro, Small and Medium Enterprises (MSME).” A few months later, Rane used the same excuse.

The survey by SIDBI was done across 20 states and two union territories, surveying over 1000 MSMEs.