MSMEs Struggle To Stay Alive
Outlook Money|November 2020
The backbone of India’s economy employing over 100 million faces trying times
Lola Nayar
MSMEs Struggle To Stay Alive

Revival in global trade and export orders does bring hope for India’s Micro, Small, and Medium Enterprises (MSMEs) that account for 48 per cent of the country’s exports and happen to be the largest employers after agriculture. However, anxiety looms large on their ability to carry on with severe liquidity crunch, as many overseas buyers are delaying payment and some have filed for bankruptcy.

According to the National Sample Survey 2015-16, there are 6.34 crore MSMEs—6.30 crore micro, 3.31 lakh small, and 5,000 medium enterprises— employing 11.10 crore people. The government has been taking various incentives and measures to promote the sector considered the economy’s backbone. However, unless addressed, the current problem holds the risk of closure of many units, leading to huge job losses—something India can barely afford.

Animesh Saxena, President of Federation of Indian Micro and Small & Medium Enterprises (FISME), says delayed payments would hit almost 90 per cent of the MSMEs. International buyers, who were earlier paying within 30 days, are now seeking 90 days for the same. “Though most big companies have been paying on agreed terms, some are refusing to honor agreements. Many are delaying payments citing various reasons including poor sales,” says Saxena, who is also the Managing Director of Neetee Clothings, an apparel exports company.

The slowdown triggered by COVID-19 forced many overseas buyers to delay payments as goods were not moving off shelves. In some cases, payments for goods delivered were delayed up to six months. Neetee is among the few fortunate that have received payments within 60 days.

Esta historia es de la edición November 2020 de Outlook Money.

Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.

Esta historia es de la edición November 2020 de Outlook Money.

Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.

MÁS HISTORIAS DE OUTLOOK MONEYVer todo
Stay Ahead Of AI-Powered Cyber Fraud
Outlook Money

Stay Ahead Of AI-Powered Cyber Fraud

AI has become an integral part of our lives, right from customer service at banks to insurance claims. But it has now become a powerful arsenal for the fraudsters too who are increasingly using AI to scam individuals and corporations alike to commit fraud. The key is to stay vigilant

time-read
7 minutos  |
December 2024
Travelling To Europe? Pack In The Essential Covers
Outlook Money

Travelling To Europe? Pack In The Essential Covers

Smart travellers must know that insurance is a must-have. From essential health coverage to theft protection and trip interruptions, know what you need for a worry-free Europe trip

time-read
6 minutos  |
December 2024
How To Spend Wisely This Year-End
Outlook Money

How To Spend Wisely This Year-End

We all spend during the year-end. But the trick is not to overspend or borrow, either from friends, or your own investment, to fund your indulgence. Maintaining balance is the key

time-read
5 minutos  |
December 2024
12 Books Devina Mehra Loved Reading In 2024
Outlook Money

12 Books Devina Mehra Loved Reading In 2024

Listing books of her choice, among the ones she reads during the year, is ace investor Devina Mehra's favourite year-end activity. She says it's a daunting task to pick around 12 books from a list of 50.

time-read
6 minutos  |
December 2024
How Do You Define Happiness?
Outlook Money

How Do You Define Happiness?

Money does buy happiness, but after a while, the appeal fades. We talk about our relationship with money, but, maybe, it’s time to revisit our relationship with happiness

time-read
5 minutos  |
November 2024
Here's How To Buy An ETF?
Outlook Money

Here's How To Buy An ETF?

Mutual funds are the preferred choice for retail investors. However, they come at a cost and fund management risk, apart from other risks. A smarter alternative is to invest through ETFs.

time-read
1 min  |
November 2024
Tax Reforms: What's In Store?
Outlook Money

Tax Reforms: What's In Store?

The government is working on reforming the existing Income-tax Act, 1961. The impending reforms have raised many questions in the minds of taxpayers. Will the old regime and deductions be done away with? Will it really simplify your life? What's the need for these reforms? We try to answer these and other questions regarding tax reforms

time-read
10+ minutos  |
October 2024
Health Insurance Sub-Limits
Outlook Money

Health Insurance Sub-Limits

Sub-limits in health insurance are restrictions placed by the insurance company on the SP maximum amount they will pay for specific expenses that are part of the total hospital bill.

time-read
2 minutos  |
October 2024
Delayed Gratification, Humility, Understanding Inflation And Risks Key To Financial Success
Outlook Money

Delayed Gratification, Humility, Understanding Inflation And Risks Key To Financial Success

The journey to financial success is continuous, requiring patience, education, and disciplined decision-making.

time-read
2 minutos  |
October 2024
Multi-Asset Investing is The Financial Equivalent of A Well-Balanced Diet
Outlook Money

Multi-Asset Investing is The Financial Equivalent of A Well-Balanced Diet

Just as you track the calories and nutrients for a well-balanced diet, you need a balanced portfolio that has multiple assets to balance the risks and returns.

time-read
2 minutos  |
October 2024