Stimulus Package: SME STOCKS READY TO BOUNCE BACK?

For the investor, the best way to judge the impact of the government’s ₹3 lakh crore stimulus package for Micro, Small and Medium Enterprises (MSMEs) is to look at the movement of the stock market and the effect on mutual funds. These industries have a major role to play in not just generating huge employment but also as a major exporter and a supportive ancillary sector for big industry. The new push towards self-reliance and reduction of import dependence under the Atmanirbhar Bharat Abhiyan has given them an entirely new role. If the strategy works, there is no reason why the stock market particularly the small and mid-cap shares, which represent the MSME sector, won’t cross the past levels. But business models and management strategies are bound to see some remarkable transformation in the COVID-hit universe, and this would have a wide-ranging impact on both profitability and investor returns. But there are many challenges that require greater attention than the government’sn liquidity led revival program. Industrial revival requires sharp up gradation in technology, wide-ranging infrastructure development and a strong drive for skill development among workers. These issues remain to be addressed. If handled well, they will do good for the investors and the economy as a whole.

- Yagnesh Kansara

For more than 18 years, since he became the Gujarat Chief Minister for the first time, a key element of Narendra Modi’s ‘Model of Growth’ was to woo large Indian and foreign firms. He believed that if Ratan Tata, Mukesh Ambani, Bill Gates, and JeffBezos funnel billions of dollars into mega projects, the economic waves would help to lift the lives of millions of people. It worked in Gujarat. His experiments with ‘Make in India’ during his tenure as the Prime Minister were steps in the same direction.