Relief Impact Report
Micro and small enterprises in India account for 50 percent of GDP and 70 percent of total employment, as observed and stated by the United Nations on the MSME Day 2020.
Such businesses are bearing the brunt of the collateral damage caused by the pandemic, making it difficult for businesses to stay afloat amidst a shrinking economy and falling demand; their vulnerability to the economic shock is a rising concern.
To quantitatively study this impact, ARTH conducted a survey in 4 districts, covering over 80 clusters in Uttar Pradesh from 6 of the major income-generating occupations at the “base of the pyramid”. The survey questionnaire was constructed to understand the immediate impact of the pandemic on the basic needs of the lower income households, like- situation of food supplies, mental awareness about the spread of the virus, preparedness and stability of their businesses, alternate income sources, impact on the families, health condition of family members, expectation from government authorities on navigating the challenges, financial status on savings and expenses, etc.
Based on the responses of the above survey, it can be summarized that majority of the small businesses generate income on a daily basis, that was severely disrupted, initially due to the government-imposed lockdown and later due to the reduction in number of customers owing to the scare of the virus. This particular segment of entrepreneurs is also largely dependent on their savings for any and every unprepared slowdown, but due to the prolonged cessation of businesses, the household economics will continue to suffer the imbalance for a longer duration.