‘My monthly earnings are down from Rs. 22,000 to Rs. 14,000’

Some people playing in Peenya Industrial Area, which was established in the early 1970s.K. Murali KumarK_MURALI_KUMAR

Some people playing in Peenya Industrial Area, which was established in the early 1970s.K. Murali KumarK_MURALI_KUMAR  

Impact of slowdown in the economy is being felt most by workers in Peenya industrial area

The hustle and bustle in Peenya industrial area appears to have dimmed down. Workers who were busy chasing deadlines for timely delivery of products to customers, are now taking it easy. Their work hours, number of shifts per day have reduced and they are getting more days off. This, however, is no reason to cheer.

Puneet B.P., who works in a company that manufactures automobile spare parts, has been at the job for 10 years but says he has never seen production fall so low. “I would get paid Rs. 22,000 a month, including overtime. But now, I have been getting only Rs. 14,000, as there is no work to be done.”

Puneet is a pre-university college dropout and the sole breadwinner of his family, which lives in Kushalanagar. He wants to find other means of income. “But there is nothing else that I am skilled at,” he says.

This is the story of many of people who work in Peenya, Asia’s largest industrial hub and peripheral areas.

The industrial area has around 8,000 MSMEs (micro, small and medium enterprises). Over the past few months, industries have been laying off workers, reducing the number of shifts and even giving two weekly offs. Proprietors complain of a slump in production, which they attribute to an almost 50% decline in automobile manufacturing and a slowdown in the economy across industry segments.

Karnataka has over 6,00,000 MSMEs that employ over 70 lakh people. More than half of these MSMEs are auto ancillary units that either manufacture or fabricate various components for commercial vehicles, passenger cars and two-wheelers, according to the Karnataka Small Scale Industries Association, (KASSIA).

A few months ago, KASSIA had said at least 30 lakh MSME workers would go jobless across the State if the Union government failed to come up with measures to counter the slowdown.

‘Production down 40%’

Nirmay A. Burji, partner, Burji Speed on Clutches, which manufactures automobile spare parts, said that production has reduced by 40% compared to four months ago. “Banks have tightened norms for loans as there are a lot of defaulters. If we do not have access to loans, our production will fall,” he said.

He says that the automobile industry is been the worst hit with many workers returning to their villages as they are not happy with the earnings.

Office-bearers of the Peenya Industries Association have met Union Finance Minister Nirmala Sitharaman seeking intervention of the central government. Industrialists attribute the slump to demonetisation and high tax slabs under the Good and Services Tax (GST) regime.

M.M. Giri, president of Peenya Industries Association, said that they have urged the government to reduce GST on labour charges (18%), which has been eating away their margins. He said that production had slumped by 25%. He pointed out that the extent of the slowdown differed with each industry. While the automobile industry is the worst hit with a 50% decline in production in the last few months, those manufacturing engineering parts had seen a 25 to 30% decline.

While the finance minister said that corporate tax will be cut to 22%, the association is unsure if this will help small and medium-size industries.

‘5 units have shut down’

A few metres away from the automobile company, a group of women are sitting comfortably on the floor of a garment factory and discussing everything from the menu for their dinner to State politics. Nobody is interrupting their chatter even though it is work hours. The women have been asked to sit in the factory although there are no orders. They are even paid for these hours.

The cutting section, which is normally buzzing with activity, wears a deserted look and the wet lab – where clothes are washed – is locked.

Rohini Raj, merchandise manager of Merena Creatives which is a 25-year-old company, said that five of their units have closed in the last one year. “Only our head office is open, and it is operating as a sick unit,” she said.

‘Payments delayed’

Different industries have been impacted in different ways.

Chandra Mohan, manager of Sri Vinayaka Packaging, says that payments have been delayed over the past few months.

“We normally ask our customers to pay within 30 days after the product is delivered. But now, we are getting payments only 90 days after delivery. This is adversely affecting our production as we are unable to procure raw material for our next order,” he laments.

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