The Government of India, in order to contain the spread of coronavirus in the country, announced a nationwide lockdown that involved the complete closure of business activities and social gatherings across the country. The MSME sector suffered the most during the lockdown due to the unavailability of raw materials, shutting down of production units, shortage of working capital, sudden drop in the domestic demand and exports, migration of labour, etc.
As a part of the ‘Atmanirbhar Bharat’ mission, the government had taken several initiatives to provide relief to MSMEs from the pandemic. Some of the key measures taken by the government to boost the MSMEs in the country include:
1. Revising the definition of MSMEs
2. Rs. 20,000 Crore subordinate debt for stressed MSMEs
3. Rs, 50,000 Crore equity infusion through Fund of Funds
4. Disallowing of global tenders in the projects upto Rs. 200 Crore
5. Rs. 3 Lakh Crore collateral-free automatic loans
While the MSME sector was on the path of recovery banking on the government’s support, then started the rising of the covid-19 curve in the country. The coronavirus cases started increasing at a rapid pace in the country from March, 2021.