Second wave effects in the MSME sector
The world’s worst outbreak of the second wave of the COVID pandemic prevents a derived economic recovery, the govt. has begun assessing the impact of the second wave of infections on different sectors and may take a glance at providing support at an appropriate time to segments requiring fiscal help. a number of the economic sources, including the products and Services Tax collections, still provide confidence and incoming data will throw less on the state of the economy, sources said.
Services sectors similar to hospitality, tourism, and aviation which had just started recovery fast from these epidemics, Besides, the MSME sector, the second-highest employer after agriculture, has been impacted a good deal and would require financial assistance. In this situation approximate 6.5 crores Micro, Small, and Medium Enterprises (MSMEs) grant 30 per cent of the GDP. Recently, the RBI also announced a loan restructuring scheme for little borrowers amid the second wave of the pandemic.
However, the sources said that fiscal stimulus would be effective just once local lockdowns ease and restrictions on business because of curfews are lifted. Most of the states have imposed curfews in these epidemic situations because lots of infections and deaths are increasing every day today. Also, the second COVID wave has gotten over a blow to both consumers and investors, which also must be uplifted.
The sources said that Niti Aayog is functioning on the main focus areas of the economy and what may well be done to stimulate demand in sectors that are impacted the foremost by COVID.as per the survey it’d be difficult to predict if a double growth target for this fiscal is going to be achieved given the uncertainty surrounding the pandemic. The Economic Survey 2020-21 released in January this year had an overhanging GDP growth of 11 per cent during the current year ending March 2022