The Hindu Business Line : Labour shortage hits micro industries in Coimbatore

Nearly 30 per cent of the workers who went to their native places for Diwali have not returned to work, a new trend that creates acute shortage of trained labour.

R. Yegya Narayanan

Coimbatore, Nov. 14 The nearly 25,000 micro enterprises in Coimbatore region reeling under severe power shortage face a double whammy.

About 30 per cent of their labourers, who went home for Diwali after receiving the annual bonus, have failed to return to work. The micro units, which mostly do jobs for large and medium industries in the region, also face the prospect of dwindling orders because of the production cuts announced by large manufacturers.

Power and pay

Speaking to Business Line , Mr J. James, Coimbatore District President, Tamil Nadu Association of Cottage and Micro Enterprises (TACT), said the units in the tiny sector employed around 2 lakh workers in the region. During the 6-7-month period early this year when there were unannounced power cuts, these units paid full wages to workers. The workers were paid around Rs 300-350 for a 12-hour stint, including overtime. But in the past few months, after the power supply was staggered, these units scheduled their working hours in line with the power supply and the workers were paid for the hours they worked, resulting in lower wages.

Mr James said most of the tiny units had paid Diwali bonus of 45-60 days’ salary to each worker. These units also employ a large number of people from other districts and States.

He estimated that nearly 30 per cent of the workers who went to their native places for Diwali have not returned to work, a new trend that creates acute shortage of trained labour.

Trained staff

Mr James said the workers were trained for 9 months to a year and the sudden loss of such a large trained workforce bodes ill for the future of Coimbatore as an industrial city.

He said many workers were opting for other sources of livelihood, like establishing small roadside eateries or driving goods carriers, as they have been haunted by uncertain working conditions for the past year due to the power shortage.

The booming construction activity in the city has also been luring these workers. He said the tiny units were also facing declining work orders from larger units that have been affected by the power cuts.

These units, which supply components to manufacturers, also face the threat of reduced offtake because of the production cuts due to the slowdown.

Many entrepreneurs, finding it difficult to get loans from banks and financial institutions, took personal loans at higher interest rates to meet machinery loan repayments. But they have now been trapped because of the difficulties in running their units.

Loan woes

Mr James reiterated his earlier demand that the State Government should press the Centre for waiver of two years’ bank interest on loans obtained by the tiny units. It should impose a one-year moratorium on repayment of loans and the banks should freeze loan recovery, he added.

The State Government should arrange for financial assistance of Rs 1 lakh to Rs 5 lakh at low interest rates to entrepreneurs who are finding it impossible to repay the personal loans and loans from NBFCs, Mr James said.

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