INTRODUCTION:

India being a developing economy relies heavily on sectors which broaden the scope of development and prosperity. In COVID-19 phase Micro, Small and Medium Companies have emerged out to be the sector which can help India in manufacturing goods and services to cater to the needs of Indian population when global supply chain is disrupted. There are three most important pillars of Indian economy namely primary sector, secondary sector and tertiary sector which glorify our nation in terms of national growth and development. They can provide employment opportunities to the people so that they can support their livelihood in this tough time.

Everything has slowed down which have impacted our daily lives. The COVID-19 pandemic has adversely impacted financial, mental and physical health of the people. This has led to disruption in the global supply chain which has caused financial distress in the economy. The government has broadened the scope of micro, small and medium enterprises by redefining their respective definitions under the Act. The Indian government is framing policies to support MSMEs and encourage people to invest in small businesses. The Modi government has come up with the policies which help MSMEs to serve Indian economy in the tough time of COVID-19 crisis and MSMEs have the ability to emerge out as warriors in the period of medical emergency and financial catastrophe. Indian economy has realized the importance of self-reliant and self-sufficient concept due to the hardships faced during COVID-19 crisis. The COVID-19 turned out to be an unfortunate event which has impacted global market and well-being of people worldwide. The Indian citizens should be encouraged to use domestic goods and minimize use of foreign goods. In International business there are some theories which say that global trade should be strengthened as no country is self-reliant in terms of natural recourses and manpower. The initiative of Indian government is to make Indian citizens acknowledge the strength and power of Indian Micro, Small and Medium Enterprises. Every international brand was once local so the need of time is to realize the fact that the power to make a brand national as well as international lies in the hand of people. The people of the country should use domestic goods and fuel the power of MSME sector. The MSME sector has emerged as an extremely energetic and vibrant sector of the Indian economy over the last few decades. There are 1.33 crore approx. MSMEs registered in the country with 59% of them engaged in manufacturing sector and 41% in the service sector. They contribute approx. 45% of India’s export.

LITERATURE REVIEW:

Bekele and Worku (2008) recognized the role of small enterprises for the purpose of employment generation and reducing poverty in Ethiopia. They although played crucial role in fabricating the structure of economy but drastic fall in their revenue is a major problem for concern. The study is based on 500 small enterprises from significant cities of Ethiopia for nearly 6 years in order to find out major factors leading to growth and viability of the Ethiopian economy. In the study major factors leading to long term survival were studied and Hazard ratios were employed to quantify the key parameters in small business sector. The study showed that involvement in social capital and networking were essential for long term existence of business. The enterprises which don’t pay attention to social capital are likely to fall 3.25 times more in comparison to firms paying undue attention to social capital and resources. The finding of the study can be used by government in framing policies for growth of small and medium enterprises.

Yadav (2012) observed that small enterprises shaped the economy destiny and turn out to be growth engine of the nation. They are major contributors in the gross domestic product (GDP) of India. The government is framing policies so that this sector continues to rise by making changes in the MSME Act and broadening the investment in this sector. The word enterprise has been replaced with industry which in itself signify the importance of this sector in Indian economy. The study examined the reasons why banking sector is reluctant to grant loans and advances to the small and budding enterprises. The lack of funds from bank hinders the performance and growth of small businesses. Today’s MSME have the potential to become future giant MNCs so, proper finance should be provided via banking channels to sustain the prosperity and viability of emerging segment in Indian economy.

Asare et al. (2015) investigated the features of MSME and suggested methods of improving their performance in the long run. The study is based on the obstacles faced by women and budding entrepreneurs in Ghana. The methodology that was employed in the study was interview method and approx. 4433 MSME operators were interviewed in 10 areas of Ghana with the help of structured questionnaire. In the paper it was found that apprenticeship has helped most of the operators in improving their performance. With the help of factor analysis it was observed that more men were given training in comparison to women operators. 90% of the MSMEs were under single businessmen. It was found that there has been significant correlation between gender and scale of operations. In the study it was found that mostly women were indulged in agriculture related work and they faced the proper of lack of effective marketing skills and appropriate training in the relevant field.

Babu et al. (2016) emphasized that small enterprises have shaped the fortune of India. Their role in fabricating India is worth appreciating. The announcement by respected Prime Minister Narendra Modi regarding make in India initiative brought positivity among the young and budding entrepreneurs. It has the potential to increase revenue for India and serve a promising growth in the near future. It should be praised by the Indian as it shall bring new foreign investments in different forms and magnitude. It will help in development of the economy and help the nation in getting home made products at reasonable cost and good quality. They are determined to provide healthy and good quality, solutions and right service at a very reasonable price in national and international markets. The article focused on understanding the benefits of Make in India initiative and role of MSMEs in improving the financial health of Indian economy.

Lamba and Jain (2020) stated that India being a developing economy needs the support of both labor intensive and capital-intensive sectors. The micro, small and medium enterprises (MSMEs) have the potential to support economy in the period of global downfall and liquidity crisis as they can produce in large quantum at relatively less investment. Due to outbreak of COVID-19 pandemic, once again nation has realized the importance of MSME sector and how they have uplifted nation in financial crisis and medical emergency. The focus is to make the small and medium enterprises strongest by injecting funds and help them to become warriors of COVID-19 pandemic which in turn revive the economy from financial stress, monetary crisis and fear of unemployment.

OBJECTIVES OF THE STUDY:

The objectives of this study are:

a) To understand the significance of MSME sectors in the period of COVID-19 pandemic.

b) To examine the challenges faced by MSME sector and policy measures taken up by Central Ministry to support vibrant and dynamic sector of Indian Economy during tough period of financial distress.

c) To analyze how MSMEs can help India in achieving the goal of self-reliant and self-sufficient.

d) To study the role of professionals in making people understand the reforms brought by Indian government in MSME sector.

MATERIALS AND METHODS:

The information gathered in this study has been taken from authentic sources of secondary data collection including past studies. The study is a descriptive analysis to understand the significance of MSME sectors in the period of COVID-19 pandemic and emphasized on role of professionals in making people understand the reforms brought by Indian government in MSME sector. Various reputed journal, magazines, periodicals and newspaper etc. are also to be studied.

MSME’s involvement in Nation Building:

The Micro, small and medium enterprises nearly account for about 45% of manufactured goods, more than 40% of exports and offer employment opportunities to approx. 40% of working population. As per the analysis of Industry Experts the MSME sector will contribute up to 50% of India’s GDP in coming 5 years. The fear of loss of job during COVID-19 pandemic has caused anxiety and restlessness among the rural folk. The monetary policy of Indian government will provide some relief to MSME sector and encourage rural population to take up employment in MSME sector as it will flourish in near future with due support of government and citizens of India. MSME will play pivotal role in making India “Atmanirbhar Bharat”. Government should stop investing in loss making PSUs instead of that they can invest in technology and invite MSMEs to take up government tenders.

Major structural challenges faced by MSME Sector:

There are various structural challenges which have proved to be hindrance in the growth and development of MSME sector. One is the lack of financial literacy among the micro, small companies. Most of the MSMEs are operated and managed by individuals or proprietors and they happened to be the directors of the company as well. They do not hire professionals who can guide them in procurement and utilization of the capital. They are deprived of financial literacy which is required to run business profitably. Second is the low capital investment in MSME sector, one of the studies of year 2017 stated that MSMEs are usually dependent on external sources for working capital management and managing infrastructure of their business. The debt equity ratio is 4:1 which show high leveraging and vulnerability of the MSME sector. Thirdly, the management of MSME enterprises by individual also dismantles the corporate structure and growth of MSME companies. Fourthly, inadequate investment in research and development by MSME also remain the reason behind slow growth.

Key Benefits of MSME Registration:

· Bank rates are lower in comparison to market rates.

· The Central government and public sector undertakings (PSUs) are required to procure 25 % of their goods from MSMEs.

· The customers of Micro, Small and Medium Enterprises (MSMEs) are liable to pay their dues within a time span of 45 days and they have the option to pay compound interest at 3 times of RBI notified bank rate.

· Financial support in terms of interest up to 2% for GST registered MSMEs on fresh loans

· There would be subsidy up to 50% for patent registration by applying for same to respective central ministry.

· There would be foreign investment of at least 51% in case of single brand retailers and it will boost MSMEs, village, handloom and cottage industry.

Measures to support Micro, Small and Medium Enterprises:

Collateral-free loans:

Indian government is lending a helping hand to MSME by providing collateral-free loans worth Rs 3 Trillion which will be made available till 31^st October, 2020.

De-stress Signal:

In order to reduce MSME stress, INR 20,000 crore subordinate loans will be provided to strain MSME. Loans will be provided to the promoters of stressed MSME up-to 15% of their stake in strained MSME and such credit will be limited to Rs 75 lakh.

MSME Definition Modified:

To overcome problem of size of enterprises investment limits in MSME has been reconsidered so that benefits can be enjoyed by all entitled business houses. Certain changes in limit which are as under:

Table 1: Showing revised definition of MSMEs on the basis of Investment and Turnover

Criteria: Investment (Plant and Machinery or equipment) and Annual Turnover
Classification	Micro	Small	Medium
Manufacturing or Service Sector	Investment< INR 1 Crore and Turnover <INR 5 Crore	Investment< INR 10 Crore and Turnover <INR 50 Crore	Investment< INR 50 Crore and Turnover<INR 250 Crore

Source- Collated by researcher/ authors.

Sharing the Pain:

MSME fund of funds to infuse Rs 50,000 Crore equity to pick up the pace growth in the economy.

Reservation of Tenders:

Government tenders of below Rs 200 Crores will now be exclusively reticent for domestic companies.

Liquidity support:

Monetary support will be given to small and medium business enterprises which failed to get loans from banks, and it is expected to circuitously benefit the deprived MSME sector. This is to impel growth and to fabricate a very self-reliant India.

Electronic Market Linkage:

E-Market Linkage will be provided to all micro, small and medium enterprises due to less possibility of trade fares due to COVID-19 outbreak in the country.

Role of Professionals in making India Self-Reliant:

Professionals in India are contributing to every field such as science and technology, commerce, social science, medicine, genetics, robotics etc. Their contribution in nation building is commendable. The professionals serving the nation with extreme forthrightness while understanding the true meaning of the call given by the Prime Minister to the entire nation, need to come forward and lead the nation on making the nation self-reliant or ‘Atmanirbhar’. In the phase of medical emergency our doctors are fighting hard against this deadly virus and protecting the lives of infected people. The scientist and researchers in the field of medicine are working hard to find medicine for COVID-19 virus. The teachers and professors are providing online learning to the students so that phase of learning remains uninterrupted. The technocrats are helping nation to adopt the digital learning which is perquisite in today’s scenario. The professionals in the field of law such as Company Secretary help the people in understanding the implications of new policy and reforms. They act as intermediary for compliances such as registration of MSMEs and many more. They also help their clients in dealing legal matters. All professionals in the diverse field are required to share knowledge with their clients so that there is holistic growth of the nation. Similarly, professionals in the other fields are contributing to the nation building and justifying their professional responsibilities. The COVID-19 has united India, and everyone is fulfilling their responsibility in bring stability and peace in the economy. India due to COVID-19 has realized that they have the potential to compete in international brands with their domestic goods. The need of the current situation is to capitalize the resources available and make them India’s strength in beating this tough time of financial distress and instability.

FINDINGS:

· The new definition of MSME is meant to encourage ease of doing business and persuade them to be more belligerent in their growth.

· The relief package of 20 Trillion will refurbish the expectation of rural population and persuade them to use domestic products.

· The new policies of Indian government will reinforce the base of MSME sector, and this sector turn out to be more rewarding for potential entrepreneurs.

· Equity injection in MSMEs through Fund of Funds will help to increase business size and will also encourage MSME to get listed on main board of Stock Exchanges.

· Disallowance of global tenders will be an encouraging step towards Self -Sufficient and Self-Reliant India.

· The monetary policies of the Indian government have eased the process of incorporating structural changes in MSME sector.

· The need to share business with MSMEs in order to build robust ecosystem.

· To capitalize the resources available and make them India’s strength in beating this tough time of financial distress and instability.

· To make adequate investment in research and development department of MSME enterprises.

· Professionals are leading the country on making the nation self-reliant or ‘Atmanirbhar’ by serving the nation with tremendous forthrightness.

CONCLUSION:

The dynamic and vibrant MSME sector has been hard hit due to outbreak of COVID-19 in the country. The entire nation is standing together to beat this virus. The Government of India is framing monetary and fiscal policies which are favorable in the period of lockdown and supporting the livelihood of poor people. The government is making every possible effort to maintain economic stability and peace in the nation. The policies of government ensure that people do not face liquidity crunch during the period of COVID-19 pandemic. The outbreak of this virus has degraded the pace of growth and development, but government is emphasizing the need to become self-reliance and reduce dependence on foreign goods. The PM is focusing that this phase of COVID-19 requires support as well as contribution of citizens in reducing the imports from other nation. In the recent scenario the contribution in the field of technology has been made by small companies instead of large business giants. So, government is coming with policies to promote investment in MSME sector which will be bountiful for entire nation in the long run. The professional is the helping hand in the period of disguise their support will help the nation in the field of innovation and how to sustain life in this new normal. The budding entrepreneurs should be encouraged to contribute in the field of innovation and technology. The unity and strength of people of the nation will not leave any stone unturned to revive India’s GDP and economic stability. The role of MSME sector and professionals is commendable in the phase of COVID-19 pandemic. The view of holistic growth and development is possible only with due contribution of every citizen of the nation during period of medical emergency and financial distress.

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Received on 09.02.2021 Modified on 12.04.2021

Asian Journal of Management. 2021; 12(3):253-257.

DOI: 10.52711/2321-5763.2021.00038