Banks lend 5% more to MSMEs in July from year-ago period even as credit growth contracts in FY21 so far

Ease of Doing Business for MSMEs: The sales loss for the retail sector in April stood at minus 88 per cent YoY but has been recovering marginally since then to minus 80 per cent in May and minus 67 per cent in June compared to respective months in 2019.

Ease of Doing Business for MSMEs: Indian retail sector, which largely comprises of MSMEs, continues to recover gradually ever since Covid struck and the following lockdown and unlock phases. From minus 63 per cent in July vis-à-vis the year-ago period, the recovery in August stood at minus 52 per cent in comparison to August 2019, according to the industry body Retailers Association of India’s (RAI) monthly business survey. The sales loss for the retail sector in April stood at minus 88 per cent YoY but has been recovering marginally since then to minus 80 per cent in May and minus 67 per cent in June compared to respective months in 2019.

“The retail industry has started to witness some green shoots especially in states that are allowing retail to operate with fewer interruptions. Support from governments at local levels across the country with the assurance of no more localised lockdowns will help fast-track recovery of sales during the upcoming festive season to almost to the same levels as last year…perhaps just 20% short of last year’s figures. Some segments may even do better,” said Kumar Rajagopalan, CEO, Retailers Association of India.

Importantly, the Ministry of Home Affairs (MHA), in its August 29 guidelines, had permitted activities except for cinema halls, swimming pools, entertainment parks, theatres, etc outside containment zones under Unlock 4.0. The government had also asked state governments to not impose any local lockdown outside the containment zones without prior consultation with the central government.

Despite the unlock 4.0 orders by the central government, local authorities in some states continue to impose partial lockdowns, which is dampening consumer sentiment and hampering recovery,” RAI said in a statement. The association had urged the DPIIT and MHA to “instruct these state governments to adhere to the central government’s Unlock 4.0 guidelines.” For instance, Punjab continued to enforce weekend lockdown and West Bengal government has announced the lockdown on September 7, 11, and 12.

Among multiple categories, the only category that showed significant improvement was consumer durables with sales at minus 23 per cent. On the other hand, food & Grocery recovered to minus 46 per cent, footwear saw minus 47 per cent sales, apparel and clothing stood at minus 54 per cent, sports goods at minus 58 per cent, and beauty & wellness at minus 56 per cent year-on-year continued to be sluggish.