59 per cent Startups and MSMEs in India likely to scale down, shut down or sell themselves this year: Survey
Mumbai, May 27 (KNN) COVID-19 second wave has hit Micro, Small and Medium Enterprises (MSME) to such an extent that more than half of the existing startups and small companies could shut shops or sell off their companies by the end of the year, said a survey by LocalCircles.
The survey received more than 11,000 responses from over 6,000 startups and MSMEs located in 171 districts of India.
''59 per cent of startups and MSMEs are likely to scale down, shut down or sell themselves this year. Only 22 per cent Startups & MSMEs have more than 3-months runway; 41 per cent are out of funds or have less than 1 month of funds left and 49 per cent plan to reduce employee compensation and benefits costs by July,” the survey added.
Startups and MSMEs have been in the race for survival, especially since the onset of the COVID-19 outbreak in 2020. India observed the countrywide lockdown from March 24th till September 2020, and the unlocking post that then the imposition of lockdown-like restrictions from April 2021. India’s economy had just started to recover from September 2020 from the 1st wave of COVID-19. However, 2nd wave of COVID-19, related lockdowns and curfews and their concomitant impact on the economy have once again brought along very high levels of uncertainty, struggles and challenges for Startups and MSMEs to find growth in their business and gather the necessary funds and capital to run their operations, the survey said.
As per the survey, the startups want the government to permit deployment of Corporate Social Responsibility (CSR) funds into Social Impact Startups. The second wave of COVID has made many realise the need for more Startups that are socially oriented in areas like emergency assistance, community engagement and mobilisation, health equipment support, etc.