Tag: COVID 19 in India

Categories
Technology

Indian Businesses Aim To Tap Consumers Directly in 2021 via Digital Platforms, Says Report

Bengaluru, January 7: As the economy limps back to normalcy, India’s focus will now be more on the digital side in terms of growing businesses. According to a new report, as the economy recovers from the lull caused by COVID-19 pandemic, businesses are preparing flexible models that operate in an online-offline mix. Moreover, the focus for digital platforms in India will be on selling directly to the consumers in 2021, the report said. “Small businesses in India are today evolving themselves as per the consumer and industry requirements”, it added.

According to the findings, entrepreneurs today understand the power of online presence and digital operations. “There has been a 3 times growth in unique businesses creating online stores,” the report mentioned. The payment gateway and ecommerce platform has on-boarded more than 2 lakh small businesses from tier II and tier III cities during the lockdown period. Akash Gehani COO & Co-founder, Instamojo, was quoted by IANS saying that small businesses are hungry for growth and much more resilient than we could’ve imagined. “Merchants have come to understand the diverse nature of consumers and that innovation is the key differentiator,” he said.

Instamojo had launched a report on the e-commerce outlook for 2021 which draws the experiences of more than a million small businesses across the country. Explaining how online presence has grown over the years, Gehani explained that small businesses owners are making necessary changes to their brands, to the way they operate, and also the way they deal with their customers online in order to survive in the growing e-commerce space. He said that more than 70 percent of these entrepreneurs had no prior online presence.

The report by IANS said that as a large number of businesses went online in 2020, they also recognised the importance of a wide social media presence. MojoVersity, Instamojo’s e-learning platform for entrepreneurs, saw a 9 times growth in enrolments and 11 times growth in the number of merchants getting digitally certified in 2020. The number of businesses updating their social media handles on their Instamojo online store went up an average of 30 percent (QoQ).

“As more entrepreneurs emerge from smaller towns and cities in India, accelerators and incubators are also expanding their services into markets to help nurture the upcoming businesses. Industry reports indicate that 40 percent of investors will come from Tier II and Tier III cities,” report added.

Categories
MSME

Big Relief for MSMEs! Ahead of Diwali, Govt Waives Interest on Interest for Loans Up to Rs 2 Crore to Help MSME Borrowers Amid COVID-19 Pandemic

New Delhi, October 25: With the onset of the upcoming festive season, the government announced a major relief to borrowers. The Modi government on Friday announced waiver of interest on interest for loans up to Rs 2 crore irrespective of whether moratorium was availed or not. Reports inform that the Department of Financial Services came out with operational guidelines in the backdrop of Supreme Court’s direction to implement the interest waiver scheme. The scheme is likely to cost the exchequer Rs 6,500 crore.

MSME loans, housing loan, education loans, credit card dues, auto loans, consumer durable loans and consumption loans are covered under the scheme. Talking about the eligibility criteria mentioned in the guidelines, the accounts should be standard as on February 29 which means that it should not be Non-Performing Asset (NPA).

On October 14, the top Court had directed the Centre to implement the interest waiver on loans of up to Rs 2 crore  under the RBI moratorium scheme ‘as soon as possible’ in view of the COVID-19 pandemic. The top Court said that the common man’s Diwali is in the hands of the government. As per the guidelines, the scheme can be availed by borrowers in specified loan accounts for a period from March 1 to August 31, 2020. “Borrowers who have loan accounts having sanctioned limits and outstanding amount of not exceeding Rs 2 crore (aggregate of all facilities with lending institutions) as on February 29 shall be eligible for the scheme,” it said.

As per the scheme, the lending institutions shall credit the difference between compound interest and simple interest with regard to the eligible borrowers in respective accounts for the said period irrespective of whether the borrower fully or partially availed the moratorium on repayment of loan announced by the RBI on March 27, 2020. The scheme is also applicable on those who have not availed the moratorium scheme and continued with the repayment of loans.

The lending institutions after crediting the amount will claim the reimbursement from the central government. Hearing the matter on October 14, the Supreme Court observed that it was concerned about how the benefit of interest waiver would be given to borrowers and said the Centre has taken a “welcome decision” by taking note of plight of the common man, but authorities have not issued any order in this regard.

A bench headed by Justice Ashok Bhushan had said that ‘Something concrete has to be done’ adding that the benefits of waivers to borrowers up to Rs 2 crore must be implemented as soon as possible. The top court, which posted the matter for hearing on November 2, told the advocates appearing for the Centre and banks that “Diwali is in your hand”.

The Centre recently told the apex court that going any further than the fiscal policy decisions already taken, such as waiver of compound interest charged on loans of up to Rs 2 crore for six months moratorium period, may be “detrimental” to the overall economic scenario, the national economy and banks may not take “inevitable financial constraints”. The top court is hearing a batch of petitions which have raised issues concerning the six-month loan moratorium period announced due to the COVID-19 pandemic.

Categories
MSME Startup

COVID-19 Impact: 78% MSMEs and Startups in India Reduced Workforce in Last 8 Months Since Pandemic Broke Out, Says Survey

Startup (Representational Image Only, Photo Credits: NeedPix.com)

New Delhi, October 20: Ever since the COVID-19 pandemic broke out in India, as many as 78% MSMEs and startups across the country have reduced workforce in the last 8 months. As per a survey by LocalCircles, only 22 percent startups and MSMEs have the same or increased workforce as compared to the pre-COVID levels. According to reports, India’s startups and MSMEs ecosystem went through a torrid time due to the deadly pandemic and lockdown that was imposed across the country. Revenues and operations were severely impacted for most businesses which led to cost cutting and some even shut down temporarily or permanently. Per CMIE, 6 million Indians had already lost white collar jobs in the March – August period.

To understand the impact of the pandemic on startup and MSME, a survey conducted by LocalCircles received over 7,000 responses from startups, MSMEs and entrepreneurs spread across 104 top business districts of the country. In the survey, startups and MSMEs were asked about how have workforce adjustments taken place in their business during the Covid-19 pandemic. In response, 25 percent said their business has shut down and all workforce has been let go, while 15 percent said their workforce has reduced by 50 percent or more.

A 19 percent said their workforce has reduced by 25-50%, and another 19 percent said their workforce has reduced by up to 25 percent. A 6 percent said their workforce has increased and 16 percent said they have same workforce as pre coronavirus time. This shows that 78 percent MSMEs and startups in India have reduced workforce in the last 8 months since the COVID-19 pandemic broke out and only 22 percent startups and MSMEs have the same or increased workforce as compared to the pre-COVID levels.

The Government also took steps to help these small businesses through the Atmanirbhar Bharat scheme, but its advantages per feedback from businesses in July this year has been quite limited, the survey said.

The startups and MSMEs in India were asked about how employment of women has been in their business 8 months into the COVID-19 pandemic. In response, 7 percent said women in their workforce have been reduced by 50-100 percent, 12 percent said women in their workforce have reduced by 25-50 percent, and 12 percent said women in our workforce have been reduced by up to 25 percent. 46 percent said they still have same number of women in the workforce as pre COVID-19. Not a single business reported increase in the number of women employees during the course of the 8 months of COVID-19 pandemic.

This means that 31 percent MSMEs and startups in India have reduced women workforce in the last 8 months. The Labour Force Participation Rate (LFPR) among women in India, is one of the lowest in the world and appears to have slid even further during the COVID -19 pandemic.

In the final question, startups and MSMEs were asked looking at the next 6 months as to how do they see employment of women in their business. In response, 50 percent said they don’t plan to hire any women employees while 30 percent said they plan to hire 1-5 women employees. 13 percent said they plan to hire 6-10 women employees and 7 percent were unsure about it.

 

Categories
Finance

MSMEs in Maharashtra: State Government Mulling Relief Package For Lockdown-Hit Sector, Says Industries Minister Subhash Desai

MSME (Photo Credits:
Emergency Credit Facility Under ECLG for small businesses hiked from Rs 25 crore to Rs 50 crore by NCGTC. | Representational Image.

In what is believed to be a move to revive the Micro Small and Medium Enterprises (MSME) sector in Maharashtra, the state government is planning to provide some relief to the sector which has been severely impacted due to coronavirus lockdown. Maharashtra industries minister Subhash Desai was quoted in a TOI report saying that the MSME sector has asked for relief which includes interest subvention, relief in electricity duty and support for wages to be dispensed during the lockdown.

Desai said that the state government will consider providing a relief package to MSME sector after this issue comes up in the cabinet. The state has 20 lakh units registered as MSMEs, of which, six lakh are in the manufacturing sector, while the others are in service sector.

Indian Merchants Chamber president Rajiv Podar said that the biggest challenge for MSMEs is a fund crunch and a large chunk is blocked by PSUs. “In addition, 65% of MSMEs are below the investable grade and are therefore, not able to access the Centre’s relief package,” he said. Podar said the RBI’s interest rate transmission has not trickled to MSMEs adding that the government will need to stimulate demand in the economy.

Meanwhile, Anant Singhania, director of J K Organisation and CEO of J K Enterprises was quoted in the report saying that the Centre’s Atmanirbhar package catered more to MSMEs, who were already borrowers, to able to borrow more. He said the rest got excluded from the package and are in need of help. “The industrial sector on the whole, “faces a funding challenge since cash flow has come to a grinding halt,” said Singhania, adding that the industry is functioning at a sub-optimal level, facing a lack of demand and lack of workers.

Further, Singhania said that the governments had to give some assurance to the large number of migrants who left the cities so that they would return. “There also needs to be some monetary infusion in the market from the government and public sentiment needs to change on the ground,” he said.