Rajiv Kumar said, Yes manufacturing is important. But there is a large number of MSMEs in the services sector too. The government decision of including wholesale and retail trade as part of MSMEs is a signal in that direction that they also need modernisation
New Delhi: Small businesses in contact-intensive services sectors such as hospitality have suffered much more because of the coronavirus pandemic than large corporations and hence deserve special attention, NITI Aayog vice chairman Rajiv Kumar said.
The manufacturing sector was important, but micro, small, and medium enterprises (MSMEs) in the services sector also have their challenges and deserve special attention, Kumar said at a virtual conference on sustainable growth of MSMEs organized by Institute for Studies in Industrial Development, a think tank, and the UN Industrial Development Organization.
Kumar referred to the government’s recent decision of including wholesale and retail traders in the MSME category as a step taken in this regard.
“Yes manufacturing is important. However, there is a large number of MSMEs in the services sector too. The recent government decision of including wholesale and retail trade as part of MSMEs is a signal that they also need modernization and that they also face challenges as in the manufacturing sector," he said. The impact of the pandemic has been hard on this sector. Kumar said.
One of Kumar’s worries was its disproportionately higher impact on smaller businesses. “It has led to some sort of inequitable growth," he said.
Large corporate houses have declared better results, while many small firms in the contact-intensive services industry suffered, he said. MSME earnings have declined by up to 50% in large segments of the sector, Kumar said.
“A very large number of businesses have unfortunately not been able to keep pace with the changes and have folded up especially in the areas called close-contact service areas.... I think they merit our attention much more," said Kumar.