The Impact of Covid-19 on India’s Small Businesses

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India is not only an Agro-economic country but also a country of MSMEs (Micro, Small, and Medium Enterprises). These MSMEs are the spine of India’s economy. Hence any harm to them will make our growth paralyzed. Our small business sectors have already faced the wrath of lockdown during the Covid pandemic and have still not fully recovered from the tragedy, creating a never healing wound in India’s history. 

The Lockdowns 

On 24th March 2020, the Prime Minister of India Narendra Modi announced in a public address that a lockdown of 21 days will be imposed in the nation from 25th onwards. 

This lockdown was one of the harshest limitations imposed on the mass of a particular country in response to Covid 19 pandemic. 

The lockdown restricted the movement of the entire country (barring emergency services) and brought it to a halt. Schools, cinemas, malls, saloons, spas, restaurants, clubs, etc all were shut down. Not only this but the vendors, small shops, daily wagers, and small industrialists were stopped from doing their work. 

This gave a big jolt to them, though the economy of the entire nation was at stake it was the lower and middle class that was suffering the most. Many people lost their jobs, many industries were shut forever, and businesses got eradicated. 

A person who established any business in a country with this huge population would have never imagined such a scenario in his life, this was the biggest problem faced by us. 

The Deep Impact of Lockdowns 

According to an independent survey conducted on several businesses, the lockdown brought misery in three phases. 

Firstly, mass layoffs and closures occurred, and big companies reduced the salary of their staff by 50%. Bonuses and increments were also postponed. However, the problems of small-scale industries were far bigger than those of the elite once.  

Businesses such as cloth manufacturing, tailoring, tiffin services, small rentals, PGs, etc became fragile. They did not see even a single customer for months as their need lost its significance. 

A report cited that 70% of small business owners in India felt that it would take at least a year for recovering the losses. Those whose business was running on loans became full of debt and had to sell their assets for repaying them. 

The already shrinking economy of sectors like real estate and others due to demonetization and GST began to shrink even more. 

On a sectoral level, manufacturing firms were largely impacted, and in some cases, manufactured products were reduced by 90 percent. 


The covid crisis was one of the biggest crises faced by India, it completely shook the out of sleep. It damaged the livelihood of lakhs of people. Almost 82 percent of Indian Businesses were negatively affected. 

Maximum staff faced economic problems and the small-scale industry barely survived the pandemic. 


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