Dreams are built on destruction. And such dreams lead to big changes in the way civilization moves. History also tells us that a reconstruction that follows massive destruction comes about as aggregated efforts of people—apparently insignificant in their individual efforts, but together, they provided the mightiest push to roll the world out of the depth of nowhere.

I am sure the same thing is about to happen, despite how the COVID-19 pandemic has ravaged our lives since 2020. My optimism is based on experience. When everything appears bleak, we tend to ignore the sliver of light that shines through the gloom. We tend to ignore that because it’s tiny till it becomes a glare that dispels the gloom.

The pandemic has indeed stretched the resources of MSMEs or micro, small and medium enterprises to the limit. It’s a no brainer that, unlike mega corporations or big businesses, the small ones do not have much leeway in marshalling resources. Last year, these units survived by drawing down on their cash reserves to pay their staff. It’s not as if they didn’t lay off workers or cut costs. However, anecdotal evidence and the industry associations’ reports suggest that the units tried their best, resources permitting, to keep paying by drawing down their reserves.

Supply constraints marked the first wave as the lockdown was global. The second wave, however, is marked by demand constraints. Employers have reabsorbed manpower—but at a lower salary. This itself has had a significant impact on demand. Lower disposable income naturally leads to lower aggregate expenditure.

On the other hand, there has been an explosion in the prices of specific medicines and treatment costs. The second wave of the COVID-19 pandemic has been harsher than the first in terms of spread and impact, requiring longer treatment. People have tended to rein in expenditure so that they have more cash if they are afflicted. All these factors have taken a toll on the market.

Last year, there was demand but no supply to meet the demand. This time there is supply but hardly a buyer in the market.

For many smaller units, this has turned out to be the death knell. The issue for them is cash flow. Meeting the bills from business and not from savings has turned out to be the biggest challenge. Analysts apprehend a contraction of 30 to 40 per cent in the cash flows for the entire sector in the current fiscal.

This is bad if you look at just the numbers. But if you factor in the resilience and the beauty of a small-scale operation, you would see the silver lining. Challenged by the lockdown during the first wave, this sector began producing essentials such as sanitizers, masks and PPE kits. Those with technology quickly switched to producing other essentials at the higher end of the technology spectrum. And we turned into a net exporter of such products as well.

This is where I see the silver lining in the gloom that is being talked about so much. We must remember that there is a demand for some commodities when demand for others dries up. Who would have thought that there would even be household demand for PPE kits? But it was there, and the MSMEs seized the opportunity and survived.

I am betting on the flexibility that is the MSMEs’ beauty, and on the sector’s entrepreneurship. I am also putting my money on this sector’s ability to seize new opportunities. That’s the silver lining that we should bet on and believe in.