As much as 59 percent of startups and MSMEs are likely to downsize, shut shop or sell business in this year
The ferocious second COVID-19 wave and extended regional lockdowns impacted sales which has affected working capital of most companies, already scrambling against the pandemic’s effects since 2020. (Image: Shutterstock)
Almost 60 percent of existing startups and small companies may shut down or sell their business amid the second COVID-19 wave, a survey of more than 6,000 startups and medium, small and micro enterprises (MSMEs) in 171 Indian districts by LocalCircles showed.
As much as 59 percent of startups and MSMEs are likely to downsize, shut shop or sell business in this year, The Economic Times reported.
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Of the companies surveyed, 49 percent plan to reduce employee compensation and benefits by July, 41 percent have less than a month’s worth of funds, and a mere 22 percent have runway for more than three months, it said.
The ferocious second COVID-19 wave and extended regional lockdowns impacted sales which has affected working capital of most companies, already scrambling against the pandemic’s effects since 2020.
India’s economy had just started showing signs of recovery from the first lockdown (implemented countrywide March-September 2020 and new local restrictions since April 2021.
.A solution expected by startups is government support to deploy corporate social responsibility (CSR) funds into startups that have social impact, such as those engaged in health equipmentr support, community engagement and emergency assistance.
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