MSMEs hugely affected by Covid-19 have earnestly asked the government to allow home delivery of goods during the lockdown period irrespective of the distinction between essential and non-essential goods and services. This was one of the numerous recommendations put forth to the government by the MSME body Federation of Indian Micro, Small and Medium Enterprises (FISME) “to enable MSMEs to create and sustain their livelihood during lockdowns taking the learnings from the first and second wave of Covid-19,” the federation said. It also urged for priority vaccination for home delivery personnel as frontline workers.
“Not only food, grocery items or medicines, etc. but the computer that one uses for working from home is also an essential product now. Hence we will not cooperate with this distinction of what is essential and what is not. Everyone needs everything. What if the AC breaks down in your house in these times? It’s going to be essential for you to buy a new one now. The things which can be safely delivered to your doorstep should be allowed. Safety is important no matter what you get delivered”, said, Anil Bhardwaj, Secretary-General, FISME told Financial Express Online.
The federation also recommended ease of doing online business for small enterprises by reducing “compliance (GST) burdens and registration norms.” This would help in enabling digitization of MSMEs, it added. They also want protection for home delivery personnel from destruction and impending police action. Mr. Bhardwaj said that the states must avoid making erratic changes in the lockdown guidelines and should give a steady three-week period policy which helps MSMEs manage their working capital and sustain their businesses. Any form of stoppage or restriction of their businesses can lead to wiping out their existence itself.
MSMEs in sectors like retail, aviation, hospitality, etc which were among the worst hit due to Covid last year, had almost achieved their pre-pandemic level recovery before the Second wave hit them post-February 2021. For example, according to retailers’ body, Retailers Association of India, monthly recovery of the retail sector had achieved 93% pre-pandemic recovery concerning their sales compared to last February and were expecting a full recovery in March 2021.
RAI, also recommended to the Ministry of Finance and the Reserve Bank of India earlier this month to include extending the benefits of ECLGS 3.0 to retail companies with additional funding and announced a moratorium on principal and interest for 6 months for the 26 stressed sectors under ECLGS. This mandates the banks to give impromptu working capital loans 30% more than current limits so that salaries and wages can be paid and providing Interest aid to reduce the interest burden. The retail sector represents an investment of Rs 2,50,000 crore while almost Rs 75,000 crore would turn NPA if working capital easing is not undertaken immediately.