GURUGRAM: The medium, micro and small industries (MSME) sector in the city is in dire straits after battling two successive lockdowns, increase in the price of raw materials and shortage of manpower. While some are struggling to pay their employees, others are planning to quit the business.
Industry leaders and associations are now seeking the state government’s aid to save the sector.
Many industry owners told TOI that even though the state allowed them to operate during the lockdown this year, production has been severely impacted.
“It is a very rough time for us. Markets across the globe are under lockdown and orders are very few. We had some orders in April, but after that the second lockdown was imposed,” said the owner of a garment manufacturer in the city. He added that due to the shortage of manpower, they haven’t been able to fulfil the few orders they received.
While both production and demand have gone down, the price of various raw materials has substantially gone up. “The cost of raw materials has seen a steep hike in the past one year.
Most raw materials have seen an increase of around 50%. We have written to the minister of industries to take note and intervene to moderate raw material prices,” said JN Mangla, president of Gurugram Industrial Association.
Mangla said the price of carbon black has gone up by 76%, copper has gone up by 50% and rubber has gone up by 31% compared to last year.
The dual impact of low demand and high raw material prices is causing many companies to falter on employee salaries, while others are considering exiting their businesses.
“My factory was closed for 45 days, and we are bleeding profusely financially. I have salaries and loan EMIs to pay. Given the situation, I am considering diluting my stake in the business and looking for an investor,” said Sanjay Bhalla, who has two automotive industries, one in Gurgaon and another in Bhiwadi.
Amidst all the troubles, industries claim they haven’t received any relief from the government. “The Centre had announced relief measures but none of that has reached us. Even workers haven’t received the promised benefits,” said Dinesh Narula, whose factory manufactures rubber products. He added that the banks had also tightened rules while issuing credit to industries, making them more vulnerable.
Worried over their future, industries are now appealing the government to step in and help them. “MSMEs which are unable to cope up with decrease in demand, enormous increase in cost of production and unrealistic pressure from banks are now left with no option but to shut down their units. This will directly affect the employment of thousands of workers and management of such units,” said HP Yadav, president, NCR Chamber of Commerce and industry.
The government meanwhile, said thousands of industrial units have availed of the relief measures.
“The major relief was the emergency credit line, which allowed an extra 25% credit without interest. Around 65,000 enterprises in Haryana have taken benefit of this scheme, amounting to Rs 4,500 crore. We have facilitated industries. If they are facing an increase in raw material prices, it is because the prices are rising globally,” said Vikas Gupta, director general of the directorate of MSME, Haryana government.
Credit Source – https://timesofindia.indiatimes.com/city/gurgaon/demand-dips-costs-soar-msmes-seek-govts-aid/articleshow/83353249.cms