COVID 19 pandemic has posed an unprecedented challenging situation and an existential crisis before the entire mankind followed by economic and social lockdown resulting in massive loss, the magnitude of which perhaps will never be quantified. The global economic outlook for the current year is subdued on account of the pandemic that has led economies to face the situation of deceleration of growth or recession. The Indian economy that has been performing quite well with one of the highest growth rates in the recent past is no exception to the economic fallout of this medical catastrophe.
With the spread of the Indian economy and employment generation capabilities, the Micro, Small and Medium Enterprises (MSMEs) are considered to be the backbone of the national economic structure. The sector is rightfully being seen as a growth booster, providing resilience to ward off global economic adversities on account of the pandemic. MSMEs employ more than 11 crore people with a GDP share of about 29 percent and is a major constituent to achieve a target of having a $ 5 trillion Indian Economy.
The Government has announced a host of measures to revive the MSME sector including relaxation of the criteria of an MSME so that MSMEs would not outgrow the benefits of being an MSME for a considerable time. With the lines between industries blurring, the Government has also proposed that the demarcation between services and manufacturing would be done away with and this would benefit new MSME registrations. Easy credit has been openly offered to MSMEs. RBI has allowed moratoriums on the interest on loans up till September 2020. Relaxations have been provided on the taxes front also. These liquidity infusion measures could be a shot in the arm for the MSME.
A substantial portion of Chartered Accountants is spread across the country, practicing as Small and Medium Professionals (SMPs). The accounting profession has a deep reach and connects to the MSME sector as SMPs are the trusted financial advisor of MSMEs providing a variety of services including project financing, working capital management, asset management, export promotions advice, budgetary forecasts, financial modelling, preparing standard operating procedures, assessing the design and operative effectiveness of internal controls besides regular accounting, auditing and taxation services. It is perhaps for this reason, the profession understands the pulse of the sector. It is possibly the appropriate time now to carry out a health check-up of the sector.
The Institute of Chartered Accountants of India has launched the MSME mentorship programme to help the Government with a framework to reboot the economy achieving India’s target of becoming a 5 trillion UD economy by 2025; and to make India Self-reliant in terms of manufacturing and to support MSME in generating employment; and to assist the MSME & Rural Entrepreneurs to become new exporters. The MSME Mentorship Programme of ICAI is in line with the ICAI continuous thrust and contribution in National interest and will further strengthen the value addition to the image as partner in Nation building.
CA. Atul Kumar Gupta