COVID-19 and Its Impact on Financial Performance of Indian Small-Scale Manufacturer

Pankaj Kumar  Tripathi; M. S.  Khan; Suhel  Ahmad

Pankaj Kumar Tripathi Assistant Professor, Faculty of Commerce, The Maharaja Sayajirao University of Baroda, Vadodara, Gujarat, India
M. S. Khan Professor and Dean, Department of Rural Management, Babasaheb Bhimrao Ambedkar University, Lucknow, UP, India
Suhel Ahmad Assistant Professor (Guest Faculty), Department of Rural Management, Babasaheb Bhimrao Ambedkar University, Lucknow, UP, India

Keywords: Small- Scale Manufacturers | Financial Performance Pandemic | Lockdown | Entrepreneurship

Abstract

Purpose: The outbreak of Coronavirus and its epidemic nature eventually turned into a pandemic engulfing the entire world into its grip. Almost all economies of the world were shut down for months resulting in blockage of goods, no new production, no sale (for many goods), unemployment, unable to meet liabilities and compliances. For small manufacturers, lack of liquidity and unavailability of credit challenged their survival and proved lethal in many instances. In this article it has been tried to gauze the impact of lockdown due to Covid-19 on small manufacturers and their revival as a supply of funds from government and its agencies.

Design/Methodology/Approach: In this exploratory study, a survey using standardised questionnaire was conducted in Lucknow, Unnao and Kanpur districts to collect responses. In total 112 responses were collected. The data was analysed using Microsoft Excel and IBM SPSS-25 (IBM, 2018). employing techniques of Chi-Square and t-test apart from basic descriptive statistics. At places for data visualisation purpose R statistical package was also used (R Core Team, 2020).

Findings: The statistical results suggest that, due to restricted or complete stoppage of financial circulation, the small manufacturers have suffered to a great extent during the lockdown period and now they are recovering at a very slow pace due to lack of necessary working capital. Many were forced to roll up their business due to the financial crisis and others are still waiting or reviving through government incentives and supply of liquidity into the market. Findings suggest that government and financial regulatory bodies should compensate the stagnant business through increased market liquidity and extending credit to the small manufacturers suffering from lack of finance.

Originality/Value: The findings and recommendations based on primary research will surely help in revival of small manufacturers.

Paper Type: Empirical Research Paper