Madhya Pradesh: State’s MSMEs bore maximum brunt of corona
Textile, automobiles, food & computer accessories most hit: Local bizmen.
The two Corona waves and subsequent lockdowns took a heavy toll on Micro, Medium and Small Enterprises of the state. Mid-year impact analysis report of fintech company Khatabook, released in first week of August, states that Madhya Pradesh tops the list of states whose MSMEs were most impacted by the pandemic. However, there is a silver lining too. While MSME lost 46% of business during the first wave in 2020, the loss came down to mere 11% in 2021.
"Based on platform insights from Khatabook's over 80 lakh MSME user-base, MSMEs experienced an 11% drop as per the median weekly business per merchant indicator across all business categories and regions due to phased lockdowns in 2021 during second Covid wave. Madhya Pradesh leads the list of most impacted states in the country," co-founder and chief executive officer of Khatabook Ravish Naresh told Free Press.
Nation-wide survey of Federation of Indian Chambers of Commerce & Industry (FICCI) stated that at least 58% of MSMEs in the state suffered a huge blow during the second wave of the pandemic.
Around 56% of the MSMEs interviewed during the study blamed 'managing costs' while 43% blamed 'tight financial liquidity' for the downfall. Weak demand was the major issue, though as per the analysis.
"The most suffered MSME industries have been identified to be textile/apparel, footwear, automobiles, traders, food and computer accessories," said Rajeev Aggrawal, president of All Industry Association of Mandideep Industrial Area. Contd. on P8
He said, "Demand contracted not only in urban areas but even rural areas saw a compression in demand during second wave. The companies in our state reported 'high impact' on their sales in rural markets. The weak demand situation impacted capacity utilization with 40% of companies seeing utilization rates of less than 50% of their installed capacity in Madhya Pradesh."
Third wave can undo the improvement: FICCI
FICCI president Uday Shankar said, "The second Covid-19 wave pandemic disrupted normal functioning of businesses. Covid management became a priority both at personal and institutional levels. There is now hope that economic activities would regain normalcy. Even as we see signs of improvement, we must prepare ourselves well for the subsequent waves. A third wave with similar or greater intensity, as is being projected by some experts, could undo gains of recent weeks."