The MSME sector which was already hit by the economic slowdown gets damaged more by the COVID-19. The Micro, Small and Medium Enterprises (MSMEs) just start to operate will take more time revive. Karnataka one of the most-industrialized states in the country has 7.6 lakh MSMEs employing nearly 2.6 crore people. Bangalore alone has 2.6 lakh MSMEs. About 20% of the industries were hit worseof which 10% have reopened. 

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Srinivas Asranna, president, Peenya Industrial Association has said the business turnover for MSMEs now is back to 10 years ago. The Peenya Industrial Area, is located on the outskirts of Bengaluru, comprises of 8,500 MSMEs. About 80%, except those supplying essential goods, had shut during the lockdown, and only 10% of them are unlikely to open again, he said. The unavailability of labour force is also a reason. K B Arasappa, president, Karnataka Small Scale Industries Association (KASSIA) said the sops and schemes announced by the government targeting the MSME sector to revive back is still on the paper and not in action. The  non-availability of bank loans is also a factor hindering the growth or reopen.

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During lockdown, many large scale industries delayed payments, lack of business and also, more ludicrously, shortage of workers at the accounts departments were the reason stated out. The pending dues are not collected affecting the cash flows. Low production, absence of labour, lack of orders, difficulties in making payments, insufficient supply of raw materials and low business turnover, is affecting now. If the government wants to rescue the  MSMEs, which contribute significantly to the GDP of the country, instead of collateral-free automatic loans the government could have announced direct cash benefits but is asking to borrow when the industry is  sailing under a debt-trap. 

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