A STUDY OF IMPACT OF COVID-19 ON SMALL BUSINESSES

Small and Medium Enterprises SMEs are the core of economic growth and development in every country. They
constitute a dominant player in the industrial landscape of most countries including India. The current study uses
secondary data to assess the depth of impact of the two biggest crises of the 21st century – the Global Financial
Crisis (2008-09) and the Covid-19 pandemic (2020-21). Secondary data reveals that Covid-19 has had a far stronger
and deeper impact on Indian MSMEs relative to the GFC mainly due to the synchronicity of impact across the globe
and across sectors due to the Covid-19 onslaught. While GFC was an exogenous shock to India limited to the
financial sector, the Covid-19 had an exogenous trigger which imploded within. The twin demand and supply shock
nature of the Covid-19 crisis exacerbated the woes of the real sector. The prevailing economic landscape at the time
of Covid-19 was grim which reduced the shock absorption capability of the world economy in general and Indian
economy in particular. Re-skilling MSMEs, periodic business monitoring using scenario analysis and conduct of
stress tests are submissions made in this study to overcome the sitting duck syndrome in future.