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India’s pandemic-hit economy is recovering but the informal sector, which has come under significant financial stress and has lost market share to larger firms, is lagging.
Nearly 10,000 micro, small and medium enterprises (MSMEs) shuttered from 2019 to 2022, according to a parliamentary response on July 25.
According to data from the erstwhile Udyog Aadhaar and Udyam, 9,667 MSMEs closed since 2019, Bhanu Pratap Singh Verma, the minister of state for MSMEs said in a written response to a lawmaker’s question in the upper house of parliament.
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This compares with 400 MSMEs that closed during 2016-2019, the minister added.
India’s pandemic-hit economy is recovering but the informal sector, which has come under significant financial stress and has lost market share to larger firms, is lagging.
The Centre had unveiled a raft of measures right after the pandemic hit, including emergency credit line guarantee for businesses, including MSMEs.
Still, MSMEs continue to face issues of rising costs, liquidity, labour, and raw material availability.
MSMEs employ millions across the country.
In response to a separate question, minister Verma said that the closure of 6,222 MSMEs during financial year 2021-22 has led to a loss of employment for 42,662 persons. Meanwhile, the shutting of 2,870 MSMEs had led to a loss of 19,862 jobs this fiscal year until July 20.