Tuesday, April 7, 2020

Lockdown will lead to shutdown

'You cannot start an MSME again.'
'It is not like a Yes Bank that someone comes and saves the bank.'
' Once the shutter is down for an MSME, nobody will come to its rescue.'





An MSME unit. Kindly note the image has been posted only for representational purposes. Photograph: Reuters

According to a survey conducted by the All India Manufacturers Organisation, over 71% of its member establishments are unable to pay wages owing to various reasons following the 21-day national shutdown to prevent the coronavirus outbreak.
The AIMO, an apex trade body focused on the interests of the medium, small and micro enterprises (MSME) sector, surveyed 5,000 traders and MSMEs across the country over the last few days, to gauge the impact of the national lockdown.
The survey's findings showed that 63% of entrepreneurs quoted cash flow problems for their inability to pay wages at this time.
"To know the feelings of a small entrepreneur you have to be in his shoes," K E Raghunathan, past president, AIMO who conducted the survey, tells

Why did you carry out this survey among your members?
We have been saying for the last 10 days that the first 10 days of a month are the most crucial for any MSME and the cash flow problems are likely to come up while paying the salaries. Because from the 1st to the 5th of every month we have (payment) commitments and so we wanted EMIs to be safeguarded for us.
Unfortunately, the advice from the RBI (on deferment of EMIs) came on March 27. but the clarity never came.
Why did you carry out this survey among your members?
We have been saying for the last 10 days that the first 10 days of a month are the most crucial for any MSME and the cash flow problems are likely to come up while paying the salaries. Because from the 1st to the 5th of every month we have (payment) commitments and so we wanted EMIs to be safeguarded for us.
Unfortunately, the advice from the RBI (on deferment of EMIs) came on March 27. but the clarity never came.


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