Every fifth MSME in the grip of economic slowdown of developed countries: Report
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Small enterprises, which account for about 40 per cent of the country’s total exports, may face adverse conditions due to the impending economic slowdown in developed countries like the US and the European Union.
Mumbai Small enterprises, which account for about 40 per cent of the country’s total exports, may face adverse conditions due to the impending economic slowdown in developed countries like the US and the European Union. This apprehension has been expressed in a report. According to a study report by rating agency CRISIL, one in five MSMEs (micro, small and medium sectors) in the country will require more working capital in the current financial year than before the pandemic.
The US and European markets account for one-third of India’s total exports. In such a situation, there is a possibility of burden on the domestic MSME units in view of the economic slowdown in both these markets. According to the report, smaller units operating in sectors such as gems and jewellery, manufacturing and dyes and pigments are already in need of more working capital. The study covers MSMEs operating in 69 sectors and 147 clusters with a total revenue of Rs 63 lakh crore, which is nearly one-fourth of the country’s gross domestic product (GDP) in the last financial year.
Pushan Sharma, Director, Crisil, said export-oriented MSME units, especially those located in Surat and Ahmedabad, would need more working capital in this financial year than before the Covid pandemic. According to this report, units in the Ahmedabad cluster may need to raise working capital for 20-25 days, while in Surat cluster, which is famous for diamond processing, this requirement may go up to 35 days.
Disclaimer:IndiaTheNews has not edited this news. This news has been published from PTI-language feed.
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