Maharashtra’s MSMEs staring at a bumpy future

Radheshyam Jadhav Pune | Updated on September 04, 2019 Published on September 04, 2019

MSMEs account for more than 80 per cent of the total employment in the State, according to the latest industrial policy   -  BL

Many units have reduced working hours, stopped hiring and are downsizing


Even as the Maharashtra government dreams of making the State a first $1-trillion economy in the country, many of its three million MSMEs — which are the backbone of the State’s economy — are bearing the brunt of the slowdown.

Apart from being an automobile hub, Maharashtra is also a leader in agro- and food processing industries. However, even as the slump has paralysed MSMEs, the State government says that the slowdown is a worldwide scenario and the government has nothing to do with it.


BJP leaders are hopeful that the slowdown will not affect their winning prospects. With the automobile sector witnessing a steep slump in sales, MSMEs that manufacture components or do job work for the sector have reduced their working hours, stopped recruitment and gone in for job cuts.

MSMEs account for more than 80 per cent of the total employment, according to the State government’s latest industrial policy. The policy adds that MSMEs are best placed to utilise local resources and create local entrepreneurship and employment.

About 40 per cent of the exports originate from MSMEs.

BJP State President and Revenue Minister Chandrakant Patil recently told reporters in Pune that the economic slowdown is not specific to India or Maharashtra and it was ‘worldwide’ scenario. He added that the educated knowthe government has nothing to do with the slowdown and hence the current scenario would not affect the (result of) forthcoming Assembly elections.

Feeling the strain

However, the ground situation across the State is different. MSMEs are complementary to major auto players in Pune and Pimpri-Chinchwad belt. According to the Forum of Small Scale Industries Association in Pimpri Chinchwad, 7-8 lakh workers dependent on the auto sector are fighting slowdown and fear of job loss. About 12,000 small and medium industries are OEM-dependent (original equipment manufacturers and are facing a major job crisis with orders dropping by 25-30 per cent.

Job loss

In the drought-hit Marathwada region, the slowdown has spread to other sectors as well and migrant contract workers in Aurangabad have lost their jobs. About 70 per cent of over 5,000 small scale industries dependent on automobile sector stand paralysed.

In Kolhapur region, foundry industries that provide components to major auto companies are facing the impact of the slowdown and the recent floods have added to the misery.

In Nashik division, about 6,000 contract workers employed in over 600 auto ancillaries have apparently lost their jobs. The production is reduced to almost half, according to local entrepreneurs.

“It is not only the manufacturing sector, but also service sector in MSME are suffering because of the slowdown. The State and the Centre must take steps to salvage the situation. The problem is even more aggravated in flood-affected districts,” said an entrepreneur Aruna Chavan from Kolhapur.

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Published on September 04, 2019
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