INTRODUCTION

‘State of the MSME’ is a survey instituted by the India SME Forum, which is India’s largest Not For Profit organisation for Micro, Small & Medium Enterprises (MSME).

There have been constant discussions in seminars and conferences on identifying the actual size of the MSME sector, its contribution to GDP & employment generation. It has been repeatedly pointed out that most surveys conducted either by the government or other agencies either have a small footprint or only reflect the economics and the opinion of a tiny sample of MSMEs. As a matter of fact the numbers put out by various agencies, including those of the government, at various periods of time are confusing, to say the least. Also most of the time in case of private agencies, the surveys are sponsored, so generally reflect the point being put across by the sponsors.

Inspite of the requirement of sizeable funding for an extensive nationwide survey, India SME Forum decided in March 2018 to pool in resources without taking an sponsors and do a survey of our own.

Undertaken with the objectives of determining the actual state of India’s MSMEs and effects of various ecosystem changes including GST and demonetisation on job creation across these organisations, the study is also meant to provide insights into key requirements as well as issues faced by India’s MSME sector.

The report is the result of India’s largest nationwide survey of micro, small and medium enterprises, instituted in April 2018. Actually conducted over a period of three months covering October, November and December 2018 on MSMEs based in twenty 23 states across the country, the base work for the survey started in April 2018 and was completed over the next six months.

“We have instituted an extensive survey to not only help us address what are the areas that are important to our constituent members as India’s largest organisation for Small and Medium Entrepreneurs. The idea was also to assess the impact of two very big things which the government implemented for the business community of this country, namely demonetisation and GST. Though the initial hit of demonetisation was felt by up to 70% of MSMEs,the fact is that the business environment has only become better.

GST has had a very positive effect on SMEs because the ease of doing business has increased. Instead of paying taxes to 15 different collectors, SMES have to pay it only a single window. So there is no bad blood as far as GST is concerned, but SMEs are still smarting under what happened after demonetisation because their business was disrupted. But at the end of the day, there seems to be light at the end of the tunnel. What I understand and keep telling is that the business environment will only get better and things won’t get worse. What I would like to add is that the survey spells out how SMEs are to be helped by the government. It’s clear that if they implement these suggestions, a lot more people will do business and pay a lot more taxes quite happily—that is, if the people in the new government, wish to listen.”