Mumbai: It is a difficult time for businesses. But it is during such a crisis, that an array of new opportunities can be explored, state experts.
During a webinar, ‘Assisting MSMEs and Reviving Growth After COVID-19’, Karur Vysya Bank’s former MD and CEO, PR Seshadri, said, “There will be new opportunities available. In addition, there will be some opportunities that will be beyond something we have foreseen.”
Taking a cue from this, Charan Singh, Non-Executive Chairman, Punjab & Sind Bank said, “The most evident opportunity is working towards making India a global office as companies look at moving out of China.”
It is estimated that there are around 9 lakh foreign companies registered in China. Singh added many companies have concentrated their production units in China. But soon the companies around the world will be looking at ways to diversify these production units.
“For these companies, India should be an alternative.”
This is exactly where Medium, Small and Micro Enterprises (MSMEs) can step in.
Singh asserted India never had a huge demand for sanitisers, but with coronavirus, the demand for face masks, sanitisers, personal protective equipment (for medical staff) etc, have seen a rise. “MSMEs should venture into sanitiser production and face masks, as its demand will continue to be there for some time.”
Umesh Revankar, MD and CEO, Shriram Transport Finance said, “There will be a permanent change in the way business functions. We should be ready for it.”
He added however that the lockdown may hurt the migration of labourers who have returned to their villages.
“Not all migrated labourers will be back. However, for once those are back, one needs to see how social security can be given,” he said.
The industries will have to relocate from cities and its outskirts to rural India where labourers have moved, Revankar stressed. “They need to be provided with better social infrastructure in rural India. And the government will have to look at it." He reiterated that mechanisation will take place and labourers who are back in their jobs will have to be trained.
Commenting on the present situation, Seshadri, said, “Such a situation was never seen in anyone’s lifetime.”
So, he added, there is a huge set of challenges that are awaiting businesses. However, Seshadri stressed that for over the last eight to nine months, the Indian economy was not doing very well. “So many businesses were already cautious,” he said. Due to this, some MSMEs had limited capital borrowing from banks.
These experts feel that the best way to get MSMEs moving will be by increasing liquidity.
Apart from making fresh capital available through banks, Revankar said, “The government and other corporates will have to clear outstanding dues of these MSMEs.”
This approach is essential to increase liquidity in the system. It was also pointed out that cutting rates by the Reserve Bank of India is not the option, but reducing risk which banks might face is critical.
Seshadri added, “The government will have to incentive banks to lend money.”
