72% of MSMEs stagnant since past 5 years: Survey

GS Paper 3

 Syllabus: changes in industrial policy and their effects on industrial growth.

Source: Indian Express

Context: A recent survey highlighted that over three-fourths of the micro, small and medium enterprises (MSMEs) are of the view that their business remained either stagnant or decreased or wound up during the last five years.

Key Highlights from the survey:

• During the last 5 years, the performance of 72% of the respondents is either stagnant or
  decreasing or stopped or wound up. Only 28% of the respondents have confirmed that they are growing.
• 45 per cent of the respondents were of the view that there was no “ease of doing” that exists in starting, running, or closing or in their living style, while only 21 percent of the respondents stated that the government has supported MSMEs adequately during the Covid-19 pandemic.
• Around 42 percent of respondents cited profit margin concerns as one of the main challenges for entrepreneurs, 70 percent are worried about delayed payment receipts, and 40 percent are on raw material price and availability.
• 52 percent of respondents found adherence to statutory compliances as tough, while 62 percent are worried about demand and order book position and 38 percent have fear of manpower sourcing and employability skills in the youth.

Challenges in the MSMEs sector that hinder it from reaching its potential

• Access to Credit
• Poor Infrastructure
• Access to Modern Technology
• Access to markets
• Legal hurdles
• Lack of skilled manpower

For Solutions: What Indian MSMEs need

Prelims Link: UPSC 2012