Pandemic Effect and Remedial Business Model in Micro, Small and Medium Enterprises: A Study in India with Special Reference to West Bengal

Micro, small and medium enterprises (MSMEs) are the backbone of Indian economy. This sector holds the pivotal position in Indian economy since it provides the largest employment after agriculture sector and for its presence in the remote place of India. The sector contributes more than 30% in the country’s gross domestic product (GDP). However, the sector is vulnerable to the economic downturn both global and domestic. Amidst the threat of COVID-19, a lot of problems and crisis for this sector also are created. The nation-wide lockdown for COVID-19 pandemic has almost stalled this sector. This chapter aims at assessing the deadly effect of COVID-19 on MSME sector of India through micro empirical survey and the remedial measures. In this study, it has been found that the sector had to face problems like suspension of business operations, disruptions in the supply chain, loss of business, large-scale migration by the workers to their native place and, above all, cash flow crisis. Moreover, a large number of businesses are unable to pay remuneration to their workers and bounded to go for lay off or permanent close down due to steep fall of revenue. Though the government has come up with financial packages, there is still enough responsibility and scope for government to take revival measures for the medium and long-term requirements of the sector.