Coimbatore: The ongoing spread of the novel coronavirus has become one of the biggest threats to the global economy. Back here, Coimbatore being an industrial city, trade associations are fearing the worst. With deficit of capital and labour shortage and a floppy beneficial moratorium announced by RBI, paint a scary picture for the Medium, Micro and Small enterprises.
Coimbatore: The ongoing spread of the novel coronavirus has become one of the biggest threats to the global economy. Back here, Coimbatore being an industrial city, trade associations are fearing the worst. With deficit of capital and labour shortage and a floppy beneficial moratorium announced by RBI, paint a scary picture for the Medium, Micro and Small enterprises.
K.Maniraj, President, Coimbatore Pump Manufacturers Association;
Coimbatore's pump industry has hit badly in more fronts, as summer is the time we can avail maximum orders", says K.Maniraj, President, Coimbatore Pump manufacturers association.
Once summer showers or the monsoon begins, the pump industry will eventually get duller, due to decrease in orders. The ongoing Corona threat and the subsequent lockdown has massacred our production. It looks we have to wait for atleast another year for things to bounce back. But the question is, will MSMEs withstand the one year or succumb.
Recalling the existing 'not so good' period prevailing in the industry, the association's President noted that in the past two years the industries have been experiencing tremendous pressure, due to various reasons. Now, this lock down has added extreme agony to the situation, leaving the industries to perish. More than 50% of industries would perish, if the government fails to support us, big time.
Not just one, all industry associations in unison state that the moratorium announced by RBI will not help industries in any way. Moratorium announced by RBI is not beneficial to a great extend. EMI for our loans have already been auto debited on March 31, many small industries are run by owners who are workers too. So, whatever money we could have saved has now gone for EMI payment. The three month period will not be of any help to the industries, as it would take take atleast 6 months for the small and micro industries to recoup and kick start normal production. Hence, the Government should consider extending the moratorium to six months to one year.
Saasthaa M.Raja, Cluster President, Coimbatore Wet Grinders Manufacturers Association
Seconding him, Saasthaa M.Raja, Cluster President, Coimbatore Wet Grinders Manufacturers Association echoed the same plight faced by other industrial associations. The wet grinder industry in Coimbatore directly and indirectly support around 30,000 people. Due to this unprecedented lock down, the industries is in no position to repay the loans. The moratorium announced by RBI is not enough to sustain.
Now, if we default two instalments, we are been told that it would add as 5 instalments to our tenure which inturn will become a huge burden to the industries. Only, unconditional support by government will help small and micro industries thrive and thereby save livelihoods of thousands of people who are dependent on this industry.
J.James, President, Tamil Nadu Association Of Cottage and Micro Enterprises (TACT)
Due to deficit capital, the micro and cottage industries will be paralysed and unable to function even after the lock down period. Mostly, cottage and micro industries are run by people who do not have a strong financial backup.These units have only three to five people as labourers. The owner has to support his employees and his own family. Generally, such industries do not get much support from the banks, hence it will be extremely difficult for these units to commence operation after this long standstill scenario.
Though RBI had announced the EMI moratorium, will three months be sufficient to get back to normalcy? It will take minimum one year for us to get back on our feet. The government should support us unconditionally and give us interest free loans. Only then our industries will survive.
Nallathambi, President , Coimbatore Sidco Industrial Estate Manufacturers Welfare Association ( COSIEMA).
Due to the pandemic and the associated fear, a majority of the migrant workers wish to go back to their home town and families. Many feel that its better to be with family in such situations. We are unclear, if those people would come back after visiting their family. Adding to other financial factors, we are expecting a huge shortage in labour force once lock down is over. This will again be a hindrance for operating industries.
According to industrialists, labour shortage is a major crisis awaiting small and micro units. Since many small foundaries and engineering industries have migrant labourers as employees, industry owners feel that once train services would resume after lock down, majority of them would head back to their native places.
Industrial associations in general allege that the banks are not supportive and unless RBI mandates certain initiatives, banks will not pass on the benefits announced by finance ministry to safeguard the welfare of the MSME sector.