By Kishan Jain, Director, Goldmedal ElectricalsÂ
We can see that COVID-19 has had a tremendous impact on India and globally, with multiple sectors being affected by the sudden but necessary lockdown. Today, with the rise in the number of coronavirus cases and an eventuality of extension in lockdown period, businesses may take several months to recover from this event with manufacturing units shut, supply chain being disrupted, imports getting stalled and a slowdown in exports. The government on its part could look at a host of measures to cushion the impact on small businesses considering that a large number of companies operate with a 1 – 2 month cash flow.
One important measure is the provision of liquidity and a steady cash flow to SMEs and MSMEs, especially those that manufacture their products locally. With a good proportion of enterprises looking for financial assistance from the government, deferring or relieving loan repayments would also be a welcome move.
Additionally, with the manufacturing industry getting adversely affected, the government would need to provide incentives that will help the sector bounce back quickly. This situation also throws open an opportunity for India to lower its dependence on imports of both essential and non-essential commodities, while promoting indigenous manufacturing.