COVID-19 Relief for MSMEs from Government

COVID-19 Relief for MSMEs from Government



MSME stands for Micro, Small and Medium Enterprises. According to the proposed definition, an enterprise is considered an MSME depending on its annual turnover. A company with turnover less than or equal to 5 crores is considered a micro-enterprise, between 5 to 75 crores is a small enterprise and between 75 to 250 crores is a medium enterprise.

Effect of COVID-19 on MSMEs



Due to the lockdown imposed last month, the MSMEs have suffered a lot and thus the government is trying to provide relief to all registered MSMEs.Due to the recent outbreak of the Coronavirus and its worldwide declaration as a pandemic, the Indian government enforced lockdown. The pandemic affected all sectors of the economy but the Medium, Small and Micro Enterprises (MSMEs) of India are most harshly affected. Factories and workplaces have been shut down, leading to many people losing jobs.

Difficulties in providing aid to MSMEs



The biggest reason is that they’re too small scale and most micro-enterprises do not even qualify for the GST threshold. This invisibility is both beneficial and harmful to them. Since they are out of the formal network, they do not have to maintain accounts, pay taxes or adhere to regulatory norms, etc. which brings down their costs, but in times of crisis like the present, it makes it difficult for the government to help them. In some countries, the government has been able to directly provide wage subsidy to those who require it because even the smallest firms were mapped. The single-biggest hurdle the MSMEs face is lack of financing. 66% percent of MSMEs are owned by people belonging to the Scheduled Castes (12.5%), the Scheduled Tribes (4.1%), and Other Backward Classes (49.7%). The gender ratio among employees is roughly 80% male and 20% female.

COVID-19 Relief Measures by Central Government



The government is providing relief to IT/ITeS MSMEs and start-ups based in Software Technology Parks of India (STPI) in the current times. The concerned government department said it will waive off payment of rentals for small IT units housed in STPI premises between March 1, 2020, and June 30, 2020. SPTI has 60 centers in India. The rent waive-off benefits almost 200 MSMEs. This move will cost the government almost 5 crores. The move is beneficial for 3000 employees working in the aforementioned 60 units. The government officials of the ministry believe some countries are looking to move away from their investments from China, and India can be one of the best options for them, due to a large number of MSMEs which are open to development. The government plans to mitigate the cash-flow pressures by: Releasing pending payments to government departments from MSMEs on a priority basis. Pausing statutory payments like Provident Fund and Employees' State Insurance contributions for around six months etc.

COVID-19 Relief measures by Reserve Bank of India



The RBI has been investing in the MSME sector but due to some constraints, it has had minimal impact. Few things the government can do to boost demand for MSME products provide tax relief from corporate taxes and GST - Goods and Service Tax, give faster refunds, and provide liquidity to rural India.

COVID-19 Relief measures by The Confederation of Indian Industry



The Confederation of Indian Industry (CII) said that there is a need for enhanced working capital, relaxed collateral norms, extended moratorium, and wage support to provide relief MSMEs during the pandemic. “With limited resources, MSMEs do not have the capacity to withstand massive shocks like Covid-19. In addition, many MSMEs are an important part of larger supply chains. The health of these MSMEs has a bearing on the entire supply chain, including the large corporates; therefore, special, immediate and substantive support measures are required to see the MSMEs through this crisis”, said Chandrajit Banerjee, Director-General, CII.

Apply now for MSME Registration



If your businesses’ annual turnover falls in the bracket of MSMEs it is essential that you register the business as MSME with the government to avail all the benefits and aids the government is providing in these trying times. The simple 5-step process for registration as MSME is:

  • Step 1: Visit the MSME Registration Website.
  • Step 2: Fill all the details on Udyog Aadhar Application.
  • Step 3: Make the online payment for your Udyog Aadhar Application.
  • Step 4: One of the registration executives will process your Udyog Aadhaar application.
  • Step 5: In 2 working days you will receive your Udyog Aadhar Certificate in your registered email address.


  • If you are facing any problem while filling the MSME form, or have any doubts on MSME Registration then you can reach us just by filling up the form and our executive will reach you on MSME Customer Helpline Number.

    Through portals like https://msmeregistrar.org which offer quick and hassle-free registration online, from the safety of your home. Online MSME registration through the above portals also saves time by cutting out the excess time required to get registered offline in government departments.