More than half of startups and small companies may be closed, or sold out
Corona may have more impact on small and new businesses. A survey has revealed that more than half of startups and small companies in the country may be closed by the end of this year. Or they can be sold.
59% of startups and MSME businesses will shut down
According to a survey, 59% of the country’s startups and small and medium (MSME) businesses will shut down or sell themselves. Only 22% of startups and MSMEs will be able to run on their own for more than 3 months. 41% are businesses that have money for 1 month or less. 49% are startups and MSMEs who plan to cut employee salaries and benefits by July.
Second wave of Covid more deadly
The survey revealed that the second wave of Covid is having more impact on startups and MSMEs. Due to the decrease in sales of most companies, they no longer have the money to run the working capital. The survey has revealed that since last year when Covid was started, the impact had started on these companies. The lockdown from March to September last year and the lockdown again this year are affecting their business.
As soon as the country’s economy came to a recovery from September last year, another wave of Covid from April this year brought states in lockdown. In such a situation, small businesses and startups are facing a lot of struggles and challenges in doing business. There is a lot of uncertainty about the business ahead of them.
New demand from startup government
Startups want the government to approve the Corporate Social Responsibility (CSR) fund to be spent in a social impact startup. A lot of startups are social who work in the health sector with emergency support, community engagement and mobilization. The survey found 6 thousand startups and 11 thousand responses from MSMEs. It was run in 171 cities.
Reserve Bank is also eyeing
On the other hand, the Reserve Bank of India has said that it will conduct a survey of small and medium businesses in MSME, Retail, Restaurants, Malls and Hospitality sectors to find out the impact of Covid on them. For this, the Reserve Bank has approved several banks to identify such businesses in the above sector and have an online meeting with them.
The Reserve Bank wants sectors affected by the second wave of Corona to be helped. Bankers believe that we have seen that the traders who have taken up the facilities of moratorium or restructuring in the first phase of Corona are still quite troubled at this time.
