Small firms struggling to come out of lockdown’s crippling blow

“MSMEs were affected badly due to COVID-19 pandemic because of loss of revenue and non-availability of manpower. The sector is finding hard to catch up, as the economy is yet to fully revive and the circulation of money has not started completely,” said S Anburajan, president, Tamil Nadu Small and Tiny Industries Association (TANSTIA), one of the associations recognised by the State and central governments.

The spread of the infection in March and the subsequent lockdowns have had a crippling impact on the MSME sector, as most industrial units had to either shut down or are on the verge of closure due to the financial crisis.

“For the MSME sector, the impact of the pandemic was worse than that of World War-II. Only 20 per cent of the units that either took bold decisions or novel measures survived the onslaught of the pandemic,” said R Sivaraja, founder, Native Lead Angels Network, a venture capital investment organisation based in Madurai. Sivaraja pointed out that the psychology of entrepreneurs has changed due to the situation. “Most entrepreneurs are now looking to shift, as they have realised that they can survive only through manufacturing essential food commodities,” he said.

Among the MSMEs, new product development (NDP) is one of the most affected sectors. “As the demand for new products has gone down during the lockdown, we have lost revenue for more than a quarter. Now we are trying to slowly limp back to normalcy. Lack of technically skilled manpower is another reason for not being able to bring back production to normal level,” said S Punitha, founder, AM Engineering Works in Ambattur.

However, Rural Industries Minister P Benjamin, said the State government has facilitated ease of business by implementing several schemes. “Many new investments have already started flowing into the State. The revival of MSMEs has commenced slowly,” he added.