70% Indian MSMEs want to cut staff to survive: AIMO survey

09 Jun '20

2 min read

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Over 70 per cent of micro, small and medium enterprises (MSME) may reduce their staff count to survive and bounce back, according to a survey conducted by the All India Manufacturers Organisation (AIMO), which found less than 20 per cent of all categories—corporations, MSMEs, self-employed persons and others—said they would continue with the same headcount.

This was the second part of the survey series conducted by AIMO and covered 46,525 participants.

The survey was conducted in association with Digitally 4 Empowerment (D4E), a social tech enterprise and other trade bodies like Federation of India Industry (FII), Association of Indian Industry (AII), Cement Manufacturers Welfare Association (CMWA), Consortium of Women Entrepreneurs of India (CWEI), Federation of Indian Women Entrepreneurs (FIWE),First World Community (FWC), Chamber of Small Industry Association (COSIA), Federation of Small and medium Industries (FOSMI), and Amausi Industries Association, Lucknow (AIA).

“The extent of the job loss will be clear by the end of August 2020, as most of the respondents were in the process of gauging how many of their employees will return and the optimum employee strength required to sustain their business in the near future,” K E Raghunathan, immediate past president of AIMO, was quoted as saying by Indian media reports.

The survey covered demand forecast, collection of pending dues, raw materials, future equated monthly instalment payments (EMIs), present interest burden and salary issues. The biggest concern of 36 per cent of the self-employed was their ability to pay EMIs as they had issues with pending payments for work done earlier.

The future of the livelihood of MSME entrepreneurs and the existence of the families that depend on them is in a very precarious position, a senior AIMO executive added.

The corporate respondents, however, had a slightly different set of perspectives, with 22 per cent citing manpower concerns, 22 per cent expressing concerns on sourcing of raw materials and price management and 23 per cent expressing concerns over new orders for the next three months.

Distribution of raw materials to the MSMEs through government undertaking National Small Industries Corporation (NSIC) through a model similar to a public distribution system on credit and at reasonable prices could help the industry solve many of the issues it faces, the respondents suggested.

Fibre2Fashion News Desk (DS)

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