MSMEs to slash jobs in coming days: FISME-Skoch survey

New Delhi, July 22 (KNN) As the Micro, Small and Medium Enterprises (MSMEs) are trying to pull themselves out from the COVID-19 pandemic, still those working in these units might have a bad time in the coming days as jobs will be slashed, according to a private survey.

A survey which was carried out by industry body Federation of Indian Micro and Small & Medium Enterprises (FISME), SKOCH Group, Bhartiya Vitta Salahkar Samiti (BVSS) and Tax Law Educare Society (TALES) estimated that 2.5-3 crore job losses in the sector by June-end. Another 1-1.5 crore workers could be fired by next month.

The survey further revealed that 37 per cent firms asserted that they needed to cut upto 50 per cent salaries to remain afloat. However, the survey also informed that business sentiment in the sector has improved since the worst month of April when 42 per cent firms wanted to slash employee salaries by half.

''Minimal hiring has started in the sector, and while businesses are restarting, they remain acutely stressed. The Rs 3 lakh crore package announced as part of Atma Nirbhar Bharat scheme, term loan moratorium and deferment of taxes have enabled some liquidity for the struggling sector,'' the survey added.

The survey also stated that Rs 3 lakh crore package had fulfilled only 19 per cent of the demand. It also warned that the sector is likely to see huge non-performing assets (NPAs) and there was need to restructure all term loans under moratorium.

Around 61 per cent of the MSMEs have said that they are not in the position to service the debt from September once the moratorium period expires. While 37 per cent of the MSMEs want the moratorium to be extended by another 6 months.

''32 per cent respondents last month suggested a 1-year extension,'' the survey said.