Uncertainty around the COVID-19 pandemic continues to prevail, alongside continued efforts to revive the economy. For institutions like the IMC Chamber of Commerce and Industry, it is a round-the-clock activity to engage with industries and the state and central governments, to rescue the economy from the clutches of recession. To understand the activities of IMC in detail, Free Press Journal’s Jescilia Karayamparambil connects with Rajiv Podar — the newly-appointed IMC president and who is also the MD of Podar Enterprises.
Given below are edited excerpts:
What is the dialogue that is taking place between the government and IMC in the case of the Micro, Small & Medium Enterprises (MSMEs)?
MSMEs play a very important role in our industries. India is home to around 63 million MSMEs. Now with the government changing the definition of MSMEs, which was much needed, will support the sector further. There was a report that stated how, after the change in the definition, 99 per cent of Indian companies now fall under the MSME category, Around 11 crore people are employed by the sector. This is huge.
The government has done a lot for this sector. The Rs 3-lakh-crore emergency credit line, or equity infusion of Rs 50,000 crore and also the decision that foreign tenders up to Rs 200 crore will not be allowed in government procurement, all this will give a boost to the industry.
The challenges continue to remain in the MSME sector. Despite providing liquidity to a large extent, the hurdle is around disbursement which is slow and a large amount of disbursement is still pending.
Yet another issue is that huge amounts of money are stuck in the public sector. Unless the money is not released on time, the MSMEs will find it difficult to survive.
In June, the government started the Champion portal. It will be a one-stop solution for MSMEs. It needs to be seen the way it is implemented.
The government is trying to encourage the industry as much as possible and handholding of the companies.
Other than clearing dues, the industry has been asking for risk capital. There is a need to encourage more venture capital and angel investors to the country. There is a lot of risk capital available.
The majority of MSMEs, which are small and medium, would value the capital and entrepreneurial support. If an investor takes the risk capital and equity, then it will go a long way to develop this sector.
Have the MSMEs been able to leave behind the disruption caused in the supply chain due to lockdown?
The country has not fully opened as yet. Many states have lifted the curbs partially, while some have opted for full closure. In some states, the cases of infection are rising. With all this in play, the MSMEs also had to close down. MSMEs are largely dependent on the supply chain. This is the case with large companies that source their supplies from MSMEs. This is hindering our economy as a whole.
This issue will continue to remain until the time a vaccine does not come.
There are talks that a large number of MSMEs are going to permanently close down. How do you see that as an industry representative?
Most of these units were hand to mouth. So, now the COVID-19-induced lockdown has hit these units further. Most of the government initiatives apply to the companies that are doing well — companies that have access to working capital. Meanwhile, many do not have access to working capital.
Secondly, demand is low. So, it is obvious that it will be difficult for MSMEs to survive. This may force many MSMEs to shut shops. As a Chamber, we can support them to a limited extent, by being their voice. We have been taking it up with central and state governments to stimulate demand. In such a scenario, revival and survival of some companies will be difficult, unless there is a package that is coming out for the sector.
The government is talking about sectoral-level packages. Which sectors will IMC focus on in that case?
IMC has 26-sector committees this year. It is a broad representation of industries. So, we cover a huge space from agriculture to education, to real estate, to banking, to skilling and so on.
I strongly feel that a boost is needed in the infrastructure space. This will revive demand due to the employment it generates. It is in the hands of the government to kickstart the economy. The government is doing what it can but more reforms are needed.
How do you view the healthcare sector?
Healthcare sector is one of the sectors that will attract the most investments. This COVID-19 pandemic has exposed the lack of health infrastructure in the country. Healthcare infrastructure will witness a huge boost. This will attract the attention of international and domestic investors. Along with healthcare, fitness will become a lot more important. Ayurvedic and homeopathic medicines have also started attracting attention.
The move from the classroom to the virtual classroom was fast. What will happen with the institutions that are standing?
My personal opinion is that institutions cannot die. The challenges that we are facing in online education is the issue of connectivity and bandwidth. The second challenge is that families cannot afford any hardware (a computer, laptop or mobile). Yet another issue is the overall development of the students – that happens by meeting and interacting with other kids in school. These children cannot bond with each other the way it happens in school. The pleasure of being in school and learning is lost in the case of online education. I believe that the school cannot be replaced.
What is your advice to students who are looking at pursuing education overseas?
Students go abroad for knowledge which they can now access online. Yet another aspect of overseas education is experience. Students go for an experience which includes work experience.
Most students who were overseas are back to India due to the visa issue.
For students who have gone to other countries should manage their finance and try hanging in there. For students preparing for the upcoming academic year, should opt for online course.
The number of intakes in the next academic year will be low.
