Coronavirus | MSMEs wait for work as demand slumps post lockdown

A cardboard-box manufacturing unit along Dabua-Pali Road in Faridabad.

A cardboard-box manufacturing unit along Dabua-Pali Road in Faridabad.   | Photo Credit: Ashok Kumar

Thousands of jobs feared lost as owners fail to pay salaries

“We don’t want help. We want work,” asserts Vinod Kumar Jaiswal of Jaiswal Grinding, a workshop in Sanjay Gandhi Memorial Nagar here. Though there are no exact figures, estimates suggest around 4,000 Micro, Small and Medium Enterprises running from this colony employ 30,000-40,000 workers. But 80% of them are now feared to have lost their jobs due to slump in demand post lockdown.

Jaiswal Grinding had ten workers, but now has only three. Even as the month draws to a close, Mr. Jaiswal is worried about paying salaries to his employees. “If it continues like this, I will be forced to lay-off even these three,” says Mr. Jaiswal, adding that there is no work. He hopes the government will help create the demand soon by allow big companies to work and lift all restrictions. “There seems little coordination between the governments. The borders are sealed and de-sealed. It is not good for business,” says Mr. Jaiswal, his clothes reeking of oil and grease.

A rickshaw-puller attached to his unit would make a decent ₹12,000-15,000 per month earlier, but he too is now hand-to-mouth. The tea-stall owner across the road and a food stall vendor catering to the workforce in the area have not returned to work since the easing of restrictions.

Long recovery time

Dotting the Dabua-Pali Road in this industrial town, hundreds of MSMEs are open for more than a month now, but there is little business. Demand has slumped to 30-40% and most unit owners agree that it may take months before the situation improves. However, the most common refrain remains the “inadequate” efforts of the government for small businesses. Benefits, even if announced, have not reached many.

Fixed charges on electricity bills remains a point in question. Though the Haryana government announced certain relief on fixed charges for the lockdown period, many ended up paying it. Komal Goyal of “Goyal Steels” says he paid ₹25,000 electricity bill two days ago and did not get any rebate on the fixed charges. Jaspal Singh, running a repair unit from inside his house in Dabua Colony, says he got ₹13,000 bill for the lockdown period with the fixed charges, but was not in a position to pay it. He has also not paid his monthly loan instalments of ₹18,667 for the past three months. “How can I pay when there is no work?,” he argues.

Kushwaha Engineering Tools, a three tier-supplier to Maurti Suzuki, in the neighbourhood has no fresh orders since it opened on May 7. Of the 40 workers, only 10 have been called for work.

‘A drop in the ocean’

V.P. Goyal has been running a cardboard boxes unit, “Anand Packs”, on Dabua-Pali Road for more than two decades. He feels that the announcements from the Union government are “a drop in the ocean” for small businessmen like him. He operates with ₹30 lakh Open Cash Credit limit, and hopes that 30-40% credit on this could have helped ease the liquidity crunch for him, especially when his over ₹50 lakh is stuck in the market due to the slump. He finds the government’s announcement of 10% credit on OCC for the MSMEs grossly insufficient.

Taking a dig at the government’s stimulus package, Mr. Goyal remarks: “We got nothing from the ₹20 lakh crore. Don’t know who the government has helped.” Like many others, he too feels the most appropriate time to impose the lockdown was now, when the cases are on the rise.

Mr. Jaiswal says that ideally the government should have stopped all payments, including loans, electricity bills and school fee, after the lockdown was announced. “How could people pay when there was no work? Though the government ordered landlords not to ask for rent and schools not to charge fee, but no one is listened to it. I had to pay my daughter’s college fee after the school struck her name off online classes,” says Mr. Jaiswal.

Neeraj Sharma of R.S. Engineers and Fabricators suggested that a fortnight of curfew would have done more good than the two months of lockdown. “Cases are on the rise. We have achieved nothing from the lockdown. Despite the lockdown, the people were still out on the roads causing the virus to spread,” said Mr. Sharma.

‘No aid from govt.’

Though many unit owners claimed that they had retained their staff in the hope of the demand to augment, they conceded that it would be difficult to do so beyond a few months if the situation persists. Prashant of “Press Metals Engineers”, a three-tier supplier to Maruti Suzuki, manufacturing air-conditioner parts, says that none of his workers got ration and financial aid from the government. He says he could not pay his workers for the month of April, but any government aid to them would have been a big help for him.

Summing up the mood among the MSMEs, Mr. Jaiswal says they all are starting from a scratch and the government should hold their hands to help them stand on their feet again.

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Printable version | Jul 7, 2020 4:20:51 PM |

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