Resilience of Small Business

By Vivek Pattanayak*

The question is often asked which small business demonstrated resilience during pandemic. The Micro Small Medium Enterprise (MSME) sector is usually referred to as small business in popular parlance in India with clear legal definition. They can be in the form of proprietorship, partnerships concern, HUF, limited liability enterprise, private limited company and public limited company. They can be in manufacturing, trading and service sector. The variety of business can include manufacture of medicines, steel fabrication, carpentry unit, welding and machining, delivery of cooked food, laundry service, hair-cutting salon, catering and vegetable shops etc.

During the pandemic despite lockdown, the economic activities which continued unabated and even got augmented were most prominently in the health sector. Hospitals, pharmacies, pharmaceutical industries were operating in high gear. Production of health-related goods like sanitizers, PPEs (Personal Protection Equipment) which were awfully in short supply during the initial phase of pandemic picked up production with elapse of time. Similarly, import of testing equipment, medicines, and health-related materials continued and even increased. Export of pharmaceutical products not only continued but increased in certain cases.

The grocery shops, vendors dealing with vegetables, fruits, fish, meat and chicken remained active except during the curfew hours. Medicine shops remained opened all the time.

In the transportation sector, lorry service, railway service and air service continued for cargo transportation including international flights. Ferry service in air transport sector started early on to bring stranded passengers from foreign countries to India and vice versa. After crisis of migrant workers, the emergency railway passenger service commenced, and it has slowly increased since then. Domestic air service started in the third week of May and it has been slowly but steadily increasing.

Despite lockdown telephone service, internet, television and radio broadcast continued. Even though railways and air services were stopped initially, the maintenance activities in a limited scale remained intact.

Banks operated.IT companies allowed their executives and engineers to work from home (WFH).

In addition, all the essential services like electricity, water supply, garbage clearances in cities had to continue.

More importantly, doctors, nurses, health assistants, policemen, civil servants, paramilitary and military personnel worked.

Other notable sector where despite disruption the economic activities continued was in the area of fast-moving consumer goods (FMCG). In the oil sector, supply of petrol and diesel remained uninterrupted.

Moreover, agricultural activities had to start first during Rabi harvesting and then after commencement of Kharif season. Fertilizers and pesticides had to be made available to farmers. In addition, mobilization of farm equipment in the rural area took place to assist in mechanized farming.

From the above one can see that despite interruption of normal life and lockdown, and curfew, a lot of activities continued.

Small business which support the above activities continued their operation reflecting their survivability during pandemic.  One should identify at this stage what kind of small business which continued to give supporting service to these activities. Even in government for a long time for budgetary reason many activities have been outsourced. As the gig economy is gaining strength, new kind of business is growing.

In the aviation sector, cargo handling in the airports has been given to private companies who also employ sub-contractors. In the telecom sector contractors are employed in many maintenance related activities pertaining to equipment and machinery. In electricity sector, maintenance activities in generating plants are also outsourced to contractors. Transmission and distribution require contractors. In oil industry, the chain of petrol pumps, cooking gas distribution represent activities of small business.

Catering service in hospitals and many public establishments is outsourced to private contractors. Security service in private hospitals, public sector and private banks are also outsourced to private agencies. Courier service initially halted its activities but restarted quickly.

Interestingly, notwithstanding contraction of economy, the stock markets remained buoyant. The Indian stock market received huge inflow of funds. A lot of people opened dematerialized account to start stock trading. Many young people joined the retail stock trade. Stock market supports a lot of small business through brokers, sub-brokers and franchise holders.

At the global level India continued to supply testing equipment, PPEs and sanitizers to many countries. In order to maintain supply chain maritime and air transport cargo traffic continued even during the severest lockdown and closure of border to passenger traffic.

IT sectors remained active and work from home (WFH) became a new normal in most of the countries.

From the above one can appreciate the resilience of some of the small business which continued their operation during the lockdown and stresses of pandemic and provided necessary support to the economy.




*The author is a former bureaucrat and held important positions in aviation and power regulatory body. He can be  reached through e-mail at [email protected]


DISCLAIMER: The views expressed in the article are solely those of the author and do not in any way represent the views of  Sambad English.

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