Ease of Doing Business for MSMEs: Is the concept of resurgent India too far to imagine in these times? Especially in the midst of this mayhem across the world where global trade may have fallen by as much as 30 per cent, GDP growth rates have declined precipitously and unemployment is likely to rise beyond any previously recorded levels; is this a hope that is utterly preposterous? The human race is driven by optimism and hope. We would not exist, were it not for these two traits. So we are compelled to think beyond the current problems the world is going through. I feel that this is likely to be the worst economic disaster of our lifetimes. As you read about how economies have to shut down completely to solve for this virus, can there possibly be any other conclusion? And yet, we must look beyond the current state of affairs and imagine a very different future.
While we fire-fight today’s problems, India Inc and our government at all levels, must also start focusing on the future. Virtually every element of this crisis creates a demand for new and different products, brand-new supply chains, as well as a revised view on global sourcing.
Before that of course, comes survival. We desperately needed the packages that have just been announced by the Finance Minister. I wish this could have come out a month earlier, but nevertheless they are welcome. The total amount announced as a relief package is really principally, a deferment of loans and welcome nevertheless. Even the insurance provided for loans given to the MSME sector represents protection for a portion of those loans, which is how it should be. Neither central nor state governments have any money so it’s understandable that they have not been able to provide direct relief to individuals and small businesses. What they have done is provided avenues for liquidity, which is what is required today for survival. And if we can survive another six to nine months, these same MSMEs can then actually think of growth.
So where are the opportunities? There are plenty of them. Traces will be looking for homes and sourcing away from China. We missed this bus the last time garment manufacturing went out of China and it went to all our neighbours. This time the opportunity will be even larger. But it won’t come to us unless we use this crisis to seriously change the way we have to do business. It is almost unimaginable to an average businessman in our country that in many other countries such as the US, you can start a business, run it efficiently, get into manufacturing, export your products, get the licenses you need, obey the laws, and all of it without having to deal with a ‘Babu’. This is the elephant in the room that we must address.