COVID-19 and MSMEs in India: An Analysis of Pandemic Shock and Policy Response

The unprecedented outbreak of Covid-19 pandemic has had a negative effect on the growth and performance of enterprises in India and around the world. Out of all, the MSMEs (Micro, Small and Medium Enterprises) were significantly impacted. The Covid-19 has further exacerbated the situation in the MSME sector, which was already suffering severe hardship as a result of the prolonged economic slowdown, demonetization and GST. The paper examines the challenges faced by MSMEs during Covid-19. The paper further assesses the initiatives undertaken by the government for promoting the growth and performance of MSMEs. At the end, the paper provides suggestions for improving the operational performance of MSMEs.