New Delhi, July 14 (KNN) Already facing the hit of COVID-19 pandemic, the Micro, Small and Medium Enterprises (MSMEs) seem to be in more trouble in the coming days, according to Former Chief Statistician Pronab Sen.

While delivering the TN Srinivasan Memorial Lecture, titled Data in Coronavirus Times, organised by the National Council of Applied Economic Research (NCAER), Sen on Monday warned that if the government takes too long to take fiscal steps, this may kill the MSMEs.

Sen said that for two months, these businesses faced production issues and now if they face further three months of lack of demand, they will die adding that ''if the government does not take fiscal steps soon to revive the economy, MSMEs will have to shut shop."

The former chief statistician also said the government is in a wait and watch mode in terms of taking fiscal decisions to revive businesses, which is not a good strategy in times of the crisis.

“At the moment, the sense I am getting is that the government is in a wait and watch mode. A wait and watch is a bad strategy at the time of the crisis,” Sen added.

He said that while the lockdown had created supply side shocks, these had transformed into demand side issues now when the lockdown was being lifted.

“The supply side issues with no production in the lockdown led to loss of income which created demand side constraints,” said Sen.

Sen said the government had created the conditions for businesses to survive to an extent, adding that ''this is now the time to take fiscal steps."

Notably, in order to quench MSMEs liquidity thirst, the government has taken several steps like a credit guarantee scheme under which a 100 per cent credit scheme worth Rs 3 lakh crore to support the MSME sector, which has been adversely affected by disruptions caused by the coronavirus pandemic.

So far, banks have sanctioned loans of about Rs 1,20,099 crore under the Rs 3 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector.

However, disbursements against this stood at Rs 61,987.90 crore till July 9 under the 100 per cent ECLGS for MSMEs.

Meanwhile, according to a joint survey conducted by Magma Fincorp and SP Jain Institute of Management and Research (SPJIMR) in June, shows that nearly 76 per cent of businesses in the MSME segment are confident of surviving the pandemic.

''Almost 50 per cent of MSMEs have witnessed a 20-50 per cent impact on their earnings due to the disruptions caused by the COVID-19 pandemic, while 76 per cent of them seem to be far more positive as they rated themselves average or above average in terms of their own financial health,'' said the survey.