JUGAD IS ON THE WAY OUT! - Pragat Dvivedi

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COVID is a test of commitment & strength of character! Month of June had some good news as the market appeared to be recovering with around 40% of businesses on an average. Different product categories behaved differently but largely every product moved positively in the graph. Undoubtedly, the pu ll was towards economical products range, benefitting the capable companies and distributors, not the weaker ones. That’s because economy comes from 1) Scale/ volume and 2) Process and standardisation, and these two factors are attributes possible only with large players. The SMEs have to understand the change in the air, where one can’t wait for long but will have to act now.

Its time for a litmus test for business in staying in power and ability to deal with crisis. “Jugad” is on its way out, and firm dealings with structured & efficient processes are the future. The road for MSME is certainly tough because they have very little option. This crisis has brought in many advantages too, which lies in their commitment (character), capital (infrastructure and base) and culture (organised business practices). There is the way out.

The biggest sufferers after COVID are those enterprises, distributors and dealers who had entered the wood-panel and decorative business for making quickprofits with very little or meagre capital. Before demonetisation (DeMo), even traders with small volume thrived without much capital. So such trade practice grew with casual approach and informal ways of business. It was all smooth for many but now weak & debt ridden businesses are falling. They are crumbling like packs of cards! It was ought to happen!

After DeMo, tax paid money and banking became essential for traders to survive. GST banged another hammer with the need to formalize business practice, and then came COVID-19. The novel coronavirus is taking the toughest test for entrepreneurs. COVID is testing the strength of character for each enterprise. In 2017, DeMo established the importance of infusing own capital; 2018-19 shook us with GST that established the importance of books & formal business and now in 2019-20, its time for a litmus test for business in staying in power and ability to deal with crisis. “Jugad” is on its way out, and firm dealings with structured & efficient processes are the future.

The road for MSME is certainly tough because they have very little option. This crisis has brought in many advantages too, which lies in their commitment (character), capital (infrastructure and base) and culture (organised business practices). There is the way out.

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