The slowdown has adversely impacted small units spread across industrial estates in the northern districts of Karnataka, with demand dropping by an estimated 40%in recent months. This has forced some of them to cut staff strength while several others have reduced working hours.
This is particularly true in districts like Belagavi and Dharwad, where there are several industrial estates housing smaller firms in different sectors. Most entrepreneurs are jittery and few want to talk about it.
However, president of the North Karnataka Small Scale Industries Association (NKSSIA) Ninganna S. Biradar is quite vocal and says the association, which has over 900 industries under it, is looking at a bleak scenario.
The slowdown has forced the companies in the industrial estates of Gokul Road in Hubballi to reduce working hours as there is not much demand. “Earlier, there would be work from 10 a.m to 8 p.m.. Nowadays, we are forced to wind up by 4 p.m.,” Mr. Biradar said.
Double whammy
A small-scale industrialist in Hubballi said the drop in demand started with the note bandi (demonetisation). “Then came GST. Although the idea is good, it was not properly implemented. I am a BJP supporter and the leaders will be angry if I say anything. But it is a fact. Things were bad earlier, and have worsened now,” he said.
In Belagavi district too not many are willing to openly talk on the issue. “The situation is very bad. Established industrialists may survive, but those who have started afresh may not,” said one entrepreneur.
“Demonetisation and GST have hit us very badly. We have closed one unit and cut staff strength in another. Some of our workers, who had diplomas and degrees, are now working as delivery boys,” said another.
Trickle-down effect
“The slowdown began with a few industries like the auto mobile but it has affected other industries,” said President of Belagavi Chamber of Commerce and Industries Shridhar Uppin.
Reduced demand following slowdown has affected cash flow to many other industries and has a trickle-down effect of eroding the ancillary units.
According to Mr. Uppin, Central and State governments are to be blamed for the slowdown. “Steps like GST and demonetisation are not bad per se . But they had to be taken up in a different manner. Implementing both the decisions in just one year has hit the economy hard,” he said.
“Secondly, the Union government announced policies like shifting to non-polluting vehicles standards like Bharat Standard 6, without giving it a proper context. This creates panic in the minds of the people.”
In Vijyapura district, the slowdown has hit several industries, including the infrastructure sector, with the business of stone crushers units declining by over 50%. Owners of many such units talk of significant losses post demonetisation and GST.
“My annual turnover was around ₹120 crore to ₹140 crore. It has come down to ₹40 crore to ₹50 crore now. The situation of others is not much different,” said Annappa Guddodgi, owner of a stone crusher unit, said.
(With inputs from Firoz Rozindar in Vijayapura)
