Several associations like TIA have demanded clarity on the industries which can work with limited workforce. [Representative Image: Reuters]
As Maharashtra undergoes a two week lockdown starting today, MSME associations in the state have opposed the government's lockdown restrictions fearing that it would push recovery to pre COVID-19 levels further and make revival difficult.
"Businesses have not recovered from the first lockdown yet, and now another has been announced. If this is how it continues I do not know how the businesses will even survive," said Satish Shetty, President, Taloja Industries Association (TIA)
"As per the authorities’ orders, we have been conducting routine RT PCR tests for all workers. Why did they make us follow SOPs and spend so much on tests when they anyway announced a lockdown," argued Shetty.
"First six months of 2020 were disrupted as a majority of labour had gone back to their hometown and very few had returned. The labour has again started moving back, I don't know how many will return to work now. We understand the government's limitations but they should also understand our situation and allow us to work with at least some manpower. MSMEs have been the worst hit because of COVID-19," Shetty added.
Taloja Industries Association represents 974 MSMEs.
Further, several associations like TIA have demanded clarity on the industries which can work with limited workforce.
On April 13, the Maharashtra government announced a 15 day lockdown and issued a notification, which included guidelines for the manufacturing sector. As per the notification manufacturing units can continue functioning but with a reduced workforce.
“Units that require processes that are of such a nature that these cannot be stopped immediately and cannot restart without considerable time requirement, may continue with a maximum 50 percent workforce at any given point of time,” stated the notification.
The notification further stated that the companies whose manufacturing units accommodated labour within the campus can continue to operate but the workforce could not leave the campus.
“All the units that provide accommodation to their labour, working either in the same campus or in an isolated facility from where movement may happen in an isolated bubble with only 10 percent of managerial staff coming from outside may continue to work. Movement of the staff outside the premises is not allowed till the end of this notification. Such units may operate in various shifts as required," it added.
The notification however did not clarify which manufacturing sectors can avail this benefit.
Lalit Gandhi, Senior Vice President, Maharashtra Chamber of Commerce, Industry & Agriculture (MACCIA) said, "The question now is not about the revival of the MSMEs but instead about their survival. The situation is dire for the small industries as there has been about a 30 percent increase in the price of the raw materials. The industries were closed for several months in 2020 yet the government charged us for the fixed power cost and no relaxation was given on that end. Waiving of the power charges will not bring any major relief but at least it would be a symbolic gesture that the government understands our plight."
"Only 40 percent labour had returned after the first lockdown, and the labour has again started moving back. I doubt if we would have sufficient manpower after this lockdown is lifted to resume operations," Gandhi noted.
He further said, "There is no clarity on which industries can function with 50 percent. We have been reaching out to the district officials for the same. Even if they allow us to function with half our labour, it is no better than a complete lockdown because the MSMEs do not have the funds to create a bio bubble, and arrange for lodging and meals to run the units. We are not running a lodge or hotel.
Coronavirus News LIVE Updates
According to Gandhi, closure of the retail outlets will have a significant impact on the MSMEs as the retail sector is the major outlet for the goods produced by the small industries.
MACCIA represents over 4 lakh MSMEs from Maharashtra.
Echoing a similar sentiment, Santosh Mandlecha, President, MACCIA said, "There is absolutely no clarity from the government's side on the restrictions. If a unit is shut down for 15 days, it will take several months for the recovery as the situation about the labour is very uncertain who have again started moving back to their hometowns. The government must announce some relief measures like the ECLGS scheme to ease off the pressure."
According to a parliamentary response given by Minister for Micro, Small and Medium Enterprises Nitin Gadkari on the disbursement under the ECLGS, Maharashtra has been the biggest beneficiary of the scheme with loan guarantees worth Rs. 32929.54 crore issued till date.
Chandrakant Salunkhe, Founder, Maharashtra Industrial and Economic Development Association (MIEDA), said, "We understand the government's decision as it has to prioritise health and lives but yes the lockdown will push MSMEs recovery by another 3 -4 months which will have an overall negative impact."
A representative of Maharashtra Industrial Development Corporation, Nagpur who did not wish to be named said, "We are trying to make sense of the restrictions and have scheduled meetings later today with the district authorities."
According to the MSME Ministry’s FY21 annual report there are about 47.78 lakh MSMEs in Maharashtra as per the National Sample Survey 73rd Round (2015-2016) of which 47.60 micro and 17,000 medium enterprises respectively.Follow our full coverage of the coronavirus pandemic here.