48% MSMEs Gone in 8 Years: Is This the End of India’s Small Business Era?

MSMEs are witnessing a significant surge in shutdowns. Over the past eight years, 48% of MSMEs have shut shops, says national Chief General Secretary of All India Vyapar Mandal Bajrang Garg. But what’s the reason for the shutdown of almost half of the small-scale MSMEs? Despite launching schemes to favour MSMEs, why the country is moving towards a downfall of the MSME industry? The meeting with traders and industrialists unveiled long-hidden truths. Below is the harsh unsettling reality of MSME businesses in India.

MSMEs across the country work hard to achieve their goals through their business. Despite grappling with numerous challenges and obstacles, they struggle to sustain themselves in the long run. The chief general secretary of All-India Vyapar Mandal Bajrang Garg had a conversation with traders and industrialists and came to know that 48% of the MSMEs have shut down in the past eight years since their start in 2016. Thus, only 3,25,00,000 small industries are surviving out of a total of 6,25,00,000 industries.

The biggest reason that came out is the complex rules and difficult-to-implement policies of the government. Policies are introduced for the betterment of the industry. However, the reality is that many of them fail to be implemented effectively. Being far away from practical implementation, these policies created further complexities for the MSMEs. Several policies do play a role in addressing their challenges effectively. For example, some credit policies have made it easy for MSMEs to get credit. However, certain misguided policies contribute to the decline of small-scale industries.

Another significant factor is the burden of heavy taxation, rising tax rates, and demonetization. In response, the government is actively implementing measures at both state and central levels to improve the situation. The Thiruvananthapuram and Alappuzha districts of Kerala have inaugurated a One-Stop Facility (OSF) aimed at enhancing the growth and support of micro-enterprises. It received funding from both the state and central government. Thus, it will be supporting 150 enterprise units in the next three years.

In Odhisa as well, CM Mohan Majhi is in favour of modifying the 2015 Industrial Policy Resolution. This policy helps the MSMEs to apply for incentives. As a result, businesses can now submit applications within the first two years of operation, an extension from the previous one-year timeframe. Such schemes come as a hope for MSMEs to survive and grow in the coming years. Stay tuned for more information on our website.