Union Minister for Micro, Small and Medium Enterprises (MSME), Jitan Ram Manjhi, conducted a high-level meeting with senior officials to assess steps needed to shield MSMEs from the negative impact of the West Asia crisis. He emphasized the importance of closely monitoring the situation and devising timely strategies to tackle challenges related to raw material availability, export obstacles, transportation issues, and working capital concerns in the MSME sector.
During the meeting, the Minister highlighted the pivotal role played by the MSME sector in India’s economic development, labeling it as the backbone of the economy. He stressed that apart from creating employment opportunities for millions, the sector significantly contributes to the nation’s manufacturing output and exports. The Government’s commitment to safeguarding the interests of MSME entrepreneurs and ensuring the sector’s growth and resilience was reiterated.
Underlining initiatives like Aatmanirbhar Bharat and the Credit Guarantee Scheme for Micro and Small Enterprises (CGSMSE), the Minister emphasized how digital empowerment and financial inclusion, led by the Prime Minister, have enhanced the MSME sector’s resilience and global competitiveness. However, a recent Crisil report warns that the ongoing West Asia conflict will severely impact Indian MSMEs this fiscal year, affecting both revenue and profitability.
The report projects a moderation in revenue growth to 7.5-8.5%, a decline of 100 basis points compared to the previous fiscal year, and a decrease in Ebitda margin to 5-5.5%, down by 50-100 basis points. The forecast would have been even more subdued if not for the growth in the domestic gems and jewellery market, driven by rising gold prices. The report, covering various sectors and clusters, paints a challenging outlook for MSMEs, highlighting the dual challenges they face due to the West Asia crisis.
