Even pre-pandemic and lockdown(s), MSMEs were plagued by low competitiveness. Most small firms were stuck in a vicious cycle of informality and low productivity, resulting in most remaining stunted, with 95% units employing less than five people. On the other hand, firms that start out ‘formal’ are 2-3 times more productive, with better chance of growth. The difficulty is that the costs of formality and compliance are onerous.
This View: India needs to turn Covid into an opportunity for MSMEs to flourish was originally published on https://economictimes.indiatimes.com/small-biz/sme-sector/view-india-needs-to-turn-covid-into-an-opportunity-for-msmes-to-flourish/articleshow/76652558.cms