In the event that the government decides to directly aid workers in micro-businesses or provide a separate set of relief measures for, say, self-employed/owner-managed enterprises, it will have to first figure out a way to ensure that the relief reaches its target. So far, the government’s efforts in this regard have yielded less consequential success.
What this has done is taken the MSMEs, especially the smaller firms, to their breaking point. Being unable to survive the crisis is leading more micro and small firms to go out of business, which has spillover effects on employment, rendering thousands of workers jobless overnight.
It is critical to note that while tax cuts may be necessary for larger businesses, which help them expand profitability (if not wages), such fiscal measures tend to exclude the ‘informal’ MSME sector where employment and turnover will not meet the minimum thresholds required to pay income tax or to be registered under the GST.
Relief for unorganised…