Impact of Covid-19 Crisis on MSME Sector in India

Abstract

After World War II, the entire nations of the world are now facing simultaneously one of the biggest health and economic crisis, which is known as Covid-19 crisis. Although there is a long history of pandemics of diseases in the past, which includes smallpox, tuberculosis, influenza pandemic (Spanish flu 1918), influenza
pandemic (H1N1 2009) and many others. However, the outbreak of these pandemic diseases has not affected so devastatingly as much as Covid-19 has affected in the entire nations world. The outbreak has started from Wuhan city of China and has spread sharply throughout the world and has led to shutdown of world economy. Covid-19 is not only now a global health crisis, but it has become an economic crisis, in the entire world and same is case with India. Nonetheless, Indian economy was already in a crunch of slow growth rate from last 2 years. However, the shutdown of economic activities with this Covid-19 crisis will further worsen the economic growth rate of India. The growth rate of Indian economy has already declined to 4.5 percent in Jan 2020, which was 7.7 percent in 2018. The World Trade Organization (WTO) has projected that global trade in goods is set to decline steeply between 13 percent and 32 percent in 2020 as the entire nations of the world are battling with the Covid-19 pandemic. However, India will suffer very badly as the biggest impact will be on the MSME sector, because it
contributes 48 percent to the total export basket of the country This sector is the largest employment providing sector and are contributing more than 30 percent to the GDP of the country .Therefore, the present paper explores the impact of Covid-19 crisis on MSMEs in India.