India needs effective policy implementation to support MSMEs

“India has progressive policy regime to support entrepreneurs. But we need effective implementation of these policies to enable MSMEs and start-up enterprises benefit from the business opportunities arising from the COVID pandemic. There is huge opportunity to produce medical kits such as masks, sanitisers, personal protection equipments etc. Also, the shifting global supply chain in the post-COVID era holds huge opportunity for Indian MSMEs. But India’s start-up enterprises and MSMEs face plethora of challenges in sustaining their business in the current circumstance. Liquidity and access to credit at affordable interest rate is a prime challenge facing these two sectors. When banks sanction loans to MSMEs, 73-85% goes towards adjustment against overdues, interest and past loans. Thus, they are left with limited fresh capital for capital investment,” said Mr Vijay Kalantri, President-All India Association of Industries (AIAI) at a webinar on “Restarting Small Business in the COVID world”. The webinar was jointly organised by All India Association of Industries (AIAI) and India’s leading commercial data, analytics and insights provider Dun & Bradstreet.

Speaking on this occasion, Mr Hitesh Sethi, Head Analytics and Business Advisory, Dun & Bradstreet India made a presentation on the opportunities for MSMEs from the COVID pandemic. He said, “India has comparative advantage in metals, chemicals, automobiles, electronics, machinery and textile. Indian MSMEs in these sectors can benefit from shift in supply chain as global buyers look for alternative source  of supply other than China.”

Mr Sethi pointed out that these six sectors are performing well and they have huge potential for employment and exports going forward.

Mr Sethi suggested Indian companies to adopt digital technologies, optimise working capital and operation cost, and form alliances with industry players to stay competitive in the current circumstance. He suggested small companies to engage in frequent interaction with their customers to build trust and confidence. He also advised enterprises to reduce cost and uncertainty by streamlining their supply chain and distribution networks.

The webinar was also addressed by Ms Preeta Misra, Director- Sales and Operation, Dun & Bradstreet India.