Micro Small and Medium Enterprises (MSMEs) and its CSR practices

COVID-19 has given a severe jolt to the MSMEs sector and had negative impact. In response to COVID-19 impact on the industry, the Government and RBI announced numerous measures to help MSMEs to come out of the hardship inflicted by the pandemic. MSMEs were provided funds by government for carrying out CSR practices. Helps offered by companies to battle COVID -19 were treated as CSR activities. Some enterprises innovated their ways by changing focus from non-essential commodities towards essential commodities like masks, hand sanitizer, PPE kits and are able to survive in difficult times. It can be viewed as CSR activity in a way even though it is done to endure. Even now MSMEs are making out how to respond to the challenges due to COVID-19. Though they are small, yet they are important and still responsible socially.

The lockdown hauled MSME owners, employers, and stakeholders in startling times, where no one was familiar to handle this sort of circumstance. Lockdown because of the pandemic had negative impact on supply of finished goods, availability of raw material and employees, and supply functions. MSMEs faced challenges associated with obligation reimbursements, wages, statutory dues, etc. Survey reports have shown that disturbance caused by the Covid-19 has affected MSMEs revenue by 20-50%. Micro and small enterprises faced maximum turmoil because of the liquidity crunch. Enterprises working in necessary commodity business were marginally better in hindered but predictable income. MSMEs located in remote areas also faced heaps of problems Even consumers had low disposable income. Several enterprises laid-off their employees due to inability to pay salaries, emptied their offices due to expenses incurred, and reduced their production due to halted demand. Obscurity in future trade a

At one extreme CSR activities by MSMEs has been considered as an additional profit-making activities and, at the other extreme, involvement in CSR with community stakeholders, has been comprehended as an entirely altruistic activity. But the criticism is outweighed as it drives the people towards growth and development. But the lessons and strategies of CSR cannot be completely switched to MSMEs. Many of the problems underlying calls for CSR do not pertain to MSMEs, which lack the power dictate standards, or move across national boundaries. At the same time, many MSMEs already exercise some sort of ‘silent social responsibility’. MSMEs can play a big role in helping the society by boosting their CSR initiatives. CSR helps to build and expand entrepreneurial foundation of the nation by aiding the enterprises through supply of raw materials and a range of factors required for production or manufacturing. CSR activities help in the development and expansion of MSMEs in India. Thus

Following are some of the CSR activities undertaken by MSMEs: The Jalandhar-based Sports Goods Foundation of India (SGFI) conducts campaigns for the abolition of child labor from the sports goods industry and the promotion of child education. It organizes tuition centers for poor children and also carries out health check-up campaigns in schools. The Hyderabad-based S. Kumar's Agri Business Corporation brought changes through innovative, sustainable, eco-friendly green initiatives. The company's CSR foundation, GUESS (Green Universe Environmental Services Society) has been originated out of the Company's firm belief and steadfast commitment to improving sustainable livelihoods while safeguarding the environment in rural and remote areas The Shashwat Foundation has been founded by Ahmedabad-based Shashwat Systems and its CEO personally involves in the growth of women enterprises across Gujarat and serves with zeal as a mentor to the many young and aspiring women entreprene

India is the first country which made corporate social responsibility mandatory. CSR can positively benefit MSMEs but let’s talk about the  concept of CSR. Corporate social responsibility (CSR) implies strategies that companies put into action as part of corporate governance that is intended to guarantee the company’s operations are ethical and beneficial for society. It is a term used to define a company’s endeavors to develop the society in some way.  Although CSR is a very wide concept that is perceived and carried out differently by each firm, the basic idea of CSR is to function in an economically, socially, and environmentally sustainable manner.

·        At present, nearly 36.1 million units of Micro, Small and Medium Enterprises are engaged in production in India. ·        MSMEs offer employment to around 120 million people in India. ·        MSMEs produce more than 6000 products in total production of the country. ·        They  contribute around 6.11% of the manufacturing GDP and 24.63% of the GDP from service activities. ·        MSMEs manufactures nearly 45℅ of the total output of the country. ·        They  are responsible for a 40% share of total export of India. ·        It boosts the lending activities of banks by 16%. ·        This sector has invariably grown at an average rate of 10% annually. ·        It contributes about 8%  to the country's GDP. ·        According to the study done by the Confederation of Indian Industries (CII), the MSME's contribution will be around 50% in the India's GDP by 2024.