(MENAFN- KNN India)
New Delhi, Nov 25 (KNN) In a concerning revelation, Bajrang Garg, the national chief general secretary of the All-India Vyapar Mandal, stated that nearly half of the country's Micro, Small, and Medium Enterprises (MSMEs) have ceased operations over the past seven years.
Citing data from global institutions like the International Monetary Fund (IMF) and corroborating figures from the Ministry of Micro, Small, and Medium Enterprises, Garg highlighted a steep decline in the number of small industries.
"In 2016, India had 6.25 crore MSMEs, but now, this number has plummeted to just 3.25 crore units-a drastic reduction of 48%," he said.
Garg attributed this alarming trend to frequent policy shifts, overly complicated regulations, and what he termed "misguided government decisions." He specifically pointed to the implementation of the Goods and Services Tax (GST) and demonetisation as major disruptors for small businesses.
"The sharp increase in taxes following GST and the liquidity crunch triggered by demonetization have dealt a severe blow to small-scale industries. These sectors, which form the backbone of India's economy, are still struggling to recover," Garg asserted.
He also emphasised that inconsistent policies have created an unstable environment for businesses, further accelerating closures. Garg's comments come amidst growing concerns over the resilience of India's small business sector, which employs millions and significantly contributes to the country's GDP.
While government initiatives like the Emergency Credit Line Guarantee Scheme (ECLGS) were launched to support MSMEs during the COVID-19 pandemic, industry leaders argue that such measures have fallen short of addressing systemic challenges.
Experts warn that the decline of MSMEs could have cascading effects on employment and the overall economy, urging policymakers to prioritize simplification of tax structures, enhanced financial aid, and long-term policy stability.
This report adds to the ongoing debate about the impact of government policies on economic growth, particularly in sectors dependent on local entrepreneurship and small-scale manufacturing.
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