Small and medium-sized businesses (SMBs) are the backbone of the Indian economy. Contributing nearly 29% to the country’s GDP and employing about 106 million people across the 42.50 million registered and unregistered organisations, SMBs play a pivotal role in the overall progress of the country. Like other sectors, SMBs too have been impacted by COVID-19 as well. But the sector is looking at this crisis as an opportunity. Echoing Prime Minister Narendra Modi’s vision of becoming ‘Atmanirbhar’, many SMBs have pledged to make India a self-sufficient country. ET Insights reached out to a cross-section of SMBs to assess the impact that COVID-19 has had on this sector.
COVID-19 – uncovering hidden opportunities in adversity
Work from Home (WFH) seems to be the new normal, especially in the Information Technology (IT) sector.
Pesto Tech recognised the business potential of WFH early, championing remote working for over a year. Their new venture – Pesto Remote – offers a 16-week intensive training programme for software engineers to start full-time international careers, remotely.
Put employees first
The biggest asset of any organisation is its employees. To this end, SMBs are prioritising employee safety and success.
Abhishek Jaiswal, Co-founder, CedCommerce, says putting employees first has helped him retain clients better.
Axestrack Software Solutions has created an emergency medical fund for their employees to help in case of any unforeseen situation, according to the company’s manager Bhaskar Maheshwari.
Mukesh Mohan Gupta, President, Chamber of Indian Micro Small and Medium Enterprises (MSMEs), emphasised that companies should also focus on skilling and re-skilling employees to help tide over the crisis.
Focus on innovation
Seetharaman Anand, Co-Founder, 20Cube advises SMBs to break out of old ideas and encourage creativity.
“Thinking creatively will turn around the business during times like these and rewarding employees for their innovation will greatly help the organization stay afloat,” he said.
Focus on collection
SMBs need to prioritise business clients who pay on time, stressed Anand.
Other measures SMBs can take during these challenging times are to keep costs low and be willing to strike a deal that benefits everyone, he added.
Gupta strongly recommends SMBs to re-look their inventory and convert high-cost debt into a low-cost one and try encashing non-productive assets.
Some key asks from the MSMEs include:
- MSMEs should be treated at par with Financial Creditors under the waterfall mechanism in Insolvency and Bankruptcy Code 2016 and no case should be admitted against MSMEs under Insolvency and Bankruptcy Code 2016
- GST should be payable on receipt of payment of any invoice as GST is not the liability of the seller.
- Immediate payments of all due payments to MSMEs from PSUs and Government departments where the 45-day period has lapsed.
- PSUs/ Government Department should be ensured within 30 days, as many large companies/ PSUs are yet to be registered. All transactions with MSMEs by eligible buyers should then be routed through TReDS (Trade Receivables Discounting System), an online mechanism that facilitates the financing of trade receivables of MSMEs through multiple financiers.