India's growth story continues despite Covid; more people turning into 'job creators'
Various waves of the Covid pandemic could not sweep off India's growth story completely.
image for illustrative purpose
New Delhi: Various waves of the Covid pandemic could not sweep off India's growth story completely. Showing resilience India has registered 1.67 lakh companies in the financial year 2021-22 (April-March), according to a report by Ministry of Corporate Affairs (MCA).
The increase is significant considering that number of companies incorporated during Financial Year 2020-21 were the highest in any of the previous years.
The MCA had registered 1.55 lakh companies in 2020-2021. The incorporations during FY 2021-22 are 8 per cent more than the incorporations during FY 2020-21. While MCA had registered 1.24 lakh companies during FY 2018-19 and 1.22 lakh companies in 2019-20 respectively, it had registered 1.55 Lakh companies during FY 2020-21.
During FY 2021-22, the States having the highest number of registrations were Maharashtra (31,107 companies) followed by Uttar Pradesh (16,969 companies) Delhi (16,323 companies) Karnataka (13,403 companies) and Tamil Nadu (11,020 companies).
Sector wise, the maximum number of companies were incorporated in the Business Services (44,168 companies), followed by manufacturing (34,640 Companies) community, personal & social services (23,16 companies) and agriculture & allied activities (13,387 companies).
This also indicates that due to less availability of suitable jobs more and more people are opening their own businesses and are in turn becoming job creators.
The growth in GDP in India during 2021-22 is estimated at 8.9 per cent as against a contraction of 6.6 per cent in 2020-21. In value terms, GDP stood at Rs 38,22,159 crore in October-December 2021-22, higher than the Rs 36,22,220 crore in the corresponding period of the 2020-21.
Gross Value-Added (GVA) in the economy is expected to grow by 8.3 per cent in 2021-22 from a 4.8 per cent contraction in 2020-21, the National Statistical Office (NSO) said. Apart from the contact-intensive segment of trade, hotels, transport, communication & services related to broadcasting, all sectors are expected to surpass pre-pandemic GVA levels this year.
Even the MSMEs (Medium, Small, and Micro Enterprises) sector in India is set for an economic rebound, the latest ASSOCHAM-CRISIL joint study stated. It added that the sector is expected to achieve mid-teen growth in fiscal 2022 with the pick-up of economic activities.
Amidst the global pandemic, India has found its innate strength to brave the storm and focus on developing its domestic ecosystem, to support both the Indian and the global markets. The Aatmanirbhar Bharat vision that has been laid by the Hon'ble Prime Minister has enthused the Indian industry with confidence that will help us enhance our global play," says MrDeepak Sood, Secretary General, ASSOCHAM.
Considered to be the engine of economies around the world, the MSME segment in India alone is estimated to have 6.3 crore units, which employs over 11.10 crore people. The sector accounts for 27 per cent of GDP and is crucial to the functioning of the economy, including in terms of employment generation, exports, and lending opportunities. The sector was the worst hit during the COVID-19 pandemic and the lockdown that followed in 2020.
Crediting MSMEs for putting the country on the firm path of economic recovery in 2022 after having had it tough in 2021, Bhushan Parekh, Director, CRISIL SME Solution, elaborated in the report, "A raft of measures by the government under its Aatmanirbhar Bharat banner has provided reprieve to MSME segment in recent months. These include Rs 20,000 crore subordinate debt for stressed MSMEs, Rs 50,000 crore equity infusion through MSME Fund of Funds (SRI Fund), 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for businesses, including MSMEs (which was subsequently increased to Rs 5-lakh crore in Union Budget 2022-23), change in definition of what constitutes an MSME, and no global tenders for government procurement up to Rs 200 crore."
The report also notes that if MSME lending by banking and non-banking finance companies (NBFCs) in fiscal 2021 rose to 7 per cent on-year, then the credit is expected to grow by 7-9 per cent (around Rs 18-lakh crore) on-year in fiscal 2022 supported by favourable government measures as well as rise in demand.
While the banks continue to dominate around 80 per cent of the MSME-lending book, it is, however, expected to reverse in the future. One of the factors driving the change is the digitalization of the MSME sector. The digital footprint of MSMEs expanded in 2021, according to the CRISIL survey of over 500 MSMEs.
