As per a recent survey conducted by the State Bank of India - India’s leading nationalised bank; it has been revealed that the small businesses have seen a gradual drop in the business market due to the demonetisation. With as many as 30 percent respondents claiming that their business has dropped by half, around 23 percent of the respondents claim that the drop in their small businesses was about 40-50% after demonetisation struck the country.
The main reason behind this downfall in the small business sector accounts to the supply of only 2000 INR currency denomination notes without the proper flow of 500 INR denomination notes in the nation. This has resulted in great chaos as there was a lack of proper flow of the currency notes in the market to provide change to the 2000 INR denomination notes. Even after all the chaos and hassled environment, the survey revealed that as many as 63 percent of the respondents support the cause of demonetisation for the betterment of the condition of the entire nation.
The State Bank of India in its Ecowrap report said that the overall downfall in the business is less than 50 percent of the majority of the small businesses which have been impacted by the move of the demonetisation. The informal roadside vendors and the business owners of the construction sector have been hit the worst. There has been witnessed less drastic impacts in the chemist shops and the automobile industry which permitted digital modes of transaction post the demonetisation phase.
As far as the textile industry is concerned, the shopkeepers who had retail business were more affected by the demonetisation move than those in the wholesale business. The jewellery and the gem business have also been hit hard by the declining sales due to demonetisation.
With the demonetisation move having impacted the MSMEs (Micro, Small, and Medium Enterprises) in the most adverse manner, the MSMEs have decided to accelerate the investment proposals by signing the VGGS (Vibrant Gujarat Global Summit) 2017 in this week.
The sources have revealed that MSMEs have streamlined as many as 16K (16,634 approx) memorandums of understanding (MoUs) for the eight edition of the VGGS Summit which takes place twice every year. The final tally having been announced at the final session of the event held on January 11th, the number of the MoUs has been expected to scale high.
The previous sitting of the VGGS Summit which took place in 2015 received an overwhelming support from the MSME sector of the country which had signed as many as 17,081 MoUs and had even proposed an investment worth 1 lakh crore INR. According to the experts, unlike the mega and the large projects of the MSMEs, the small enterprises or industries have shown better results and ratio in the implementation of the project.
With around 215 MSMEs including the small, micro and medium scale industries in Vatva, these have decided to go forward with signing an investment proposal with MoUs worth around 1,000 crore INR during the VGGS Summit 2017. After the prohibition has been removed from Vapi, Vatva, and Ankleshwar, the chemical companies, and industries which have been operating in these areas have taken the plunge into the expansion drive of the MSMEs in this Summit. Moreover, 250 industrial units from Naroda industrial area located in Ahmedabad are also about to sign the MoUs with an investment of around 700 crore INR.
As many as 1,431 proposals have come from the urban development sector as well in addition to the MSMEs, which is the second largest number. Then follows the other sectors like fisheries, animal husbandry, mineral-based projects, rural development, and food processing.
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