The implementation of the Goods and Services Tax (GST) is expected to alter the business dynamics in favour of micro, small and medium enterprises (MSMEs) based in Tier-2 or smaller cities. Today, MSMEs with manufacturing units based in small cities spend relatively more on materials and less on manpower, compared with their peers in metros and Tier-1 cities, a CRISIL analysis of over 2,200 MSMEs reveals.
The share of material costs in smaller cities is nearly 73 per cent of the cost structure, a good 500 basis points (bps) higher than in larger cities. This is because large-city manufacturers
The share of material costs in smaller cities is nearly 73 per cent of the cost structure, a good 500 basis points (bps) higher than in larger cities. This is because large-city manufacturers
