MSEs are adapting to a brave new world

The unorganised ones are feeling the heat of GST, but long-term gains outweigh transitory pain

CRISIL’s discussions over the past few days with organised micro and small enterprises (MSE), especially those dealing with medium-to-large enterprises and government entities, show they have taken to the goods and services tax (GST) regime fairly well.

On the other hand, unorganised MSEs — mostly small units with low compliance levels and high dependence on cash transactions — are struggling to cope, and are seeing clients shifting to GST-compliant rivals. Compounding the problem is a stretch in working capital because clients are holding back payments for want of clarity on applicable rates and invoice-matching process.

The refrain is that demand