The Chennai region’s vulnerable micro and small industrial sector will potentially lose nearly ₹840 crore every week due to the floods, according to credit rating agency SMERA.

The agency, in a statement, said these estimates are conservative and the financial impact can double with every week of business forgone. SMERA Ratings also estimated that an average Chennai citizen is looking at ₹2,530 of income loss with every week forgone.

The forgone income is nearly 2 per cent of potential per capita income in the Chennai region and the loss will double every passing week of commercial stalemate, said SMERA, a joint initiative of Small Industries Development Bank of India, Dun & Bradstreet Information Services and public and private sector banks.

Losses to livestock and food-related businesses can add a 20 per cent mark-up to this estimation.

“On a national scale, SMERA estimates that the loss incurred by Chennai’s industrial sector can potentially shave 0.07 per cent off the Indian Industrial Gross Value Added (per week). A fast-tracked approach to get the industry back on track is the need of the hour,” the agency said. SMERA has estimated that Chennai contributes nearly 3 per cent to India’s GDP and an impact from such a natural calamity will have serious ramifications at both the local and national levels, it added. The agency’s analysis, which considers MSME Ministry data, is of the view that the Chennai area’s manufacturing industry is worth ₹1,51,800 crore.

 There are about 36,000 MSMEs registered in the Chennai region and SMERA’s estimates have a sample size of nearly 20,000.

Among the large contributors, SMERA estimates that ‘automotive components’ and related businesses contribute 28 per cent to the region’s economy; IT-related services contribute 16.91 per cent; gold around 8 per cent; leather 6.4 per cent; printing 4.16 per cent; and garments 3.27 per cent.

Related Topics
comment COMMENT NOW