India was in the throes of reduced economic growth which was further impeded by the Covid-19 led lockdown that saw demand for goods and services virtually dry up, barring ones categorized as essentials. Coinciding with the decision to remove the lockdown in phases, the government also announced an economic package directed at boosting growth in the economy.
From the Rs. 20 lakh crore package that Prime Minister Narendra Modi announced in May, it set aside Rs.3 lakh crore towards the micro, small and medium enterprises for obvious reasons. For starters, it employs the maximum number of people after agriculture, accounts for nearly half of India’s total exports earnings and forms the backbone of the manufacturing sector.
However, these efforts are aimed only at business continuity, says Shubhashish Bhattacharya, an independent consultant who works with micro, medium and large enterprises in the areas of strategic turnarounds, change management, people development and learning.
“In my twenty-five years as professional consultant, this is the first occasion where I have seen things come to such dire straits. The government’s package would obviously help SMEs but to the point that they would be able to access additional working capital via banks at lower cost and without collaterals,” he told CXOToday in a video chat.
However, Bhattacharya feels that there is no big cause for concern as India’s economy would get going through a demand push that government has initiated through the farm-sector focus in recent times and once that starts, it would witness a U-curve that could be a broad or narrow one based on the interventions that government would have to make over the next 2-3 years.
“There has to be more interventions, that too sector-specific ones,” he argues and suggests that the government would have to carefully monitor the global demand situation before allocating funds when it does so next. “Because, there is no point doing a bulk investment at this point as if the sector isn’t generating demand, the money is gone,” he adds.
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