COVID-19 Pandemic and Micro, Small and Medium Enterprises (MSMEs): Policy Response for Revival

Abstract

The outburst of COVID-19 has not only distressed the economic and social activities of Indian economy but also the world economy as a whole. Out of different economic activities, the micro, small and medium Enterprises (MSMEs) affected a lot. This article attempts to measure the contribution of MSMEs towards Indian economy and also attempts to find out the challenges and problems in pre- and during COVID period. We have used different descriptive statistics to measure the impacts of MSMEs and also use of correlation and co-integration to measure the relationship among the variables such as number of MSMEs, investment amount, employment and output. This pandemic is an exceptional shock for MSMEs. It is evident that there is a high degree of significant positive correlation among the variables. Johansen’s co-integration analysis resulted in the rejection of the null hypothesis signifying the existence of long-run co-integrating relationship. Given the extensive COVID-19 chaos, the government needs to establish an ongoing monitoring system and declare urgent relief steps to improve the MSMEs sector’s confidence. E-market linkage for MSMEs should be promoted, and fiscal stimulus should increase for this sector. The Government of India should take various measures to improve Indian MSMEs and achieve the vision of Self-reliant India.