MSMEs in Pune auto hub demand government’s intervention to tackle financial crisis

Radheshyam Jadhav Pune | Updated on March 23, 2020

Say Covid-19 is ‘last straw’ amid plunging sales

About 12,000 MSMEs in Maharashtra’s auto hub have demanded the government’s intervention to tackle the financial crisis created by the coronavirus outbreak.

“All the original equipment manufacturers (OEM) have stopped work and this has had a spiralling impact on over 12,000 MSMEs in the Pune region,” said Pimpri Chinchwad Small Scale Industries Association (PCSSIA) President Sandeep Belsare. “There are about five lakh workers directly and indirectly dependent on the MSMEs. For the last one-and-a-half years we have already been reeling under a slowdown, and the Covid-19 outbreak has come as the last straw.”

The Pune region, one of India’s largest auto hubs, houses Tata Motors, Mahindra & Mahindra and Bajaj Auto apart from international majors such as Volkswagen and Mercedes.

Work is at a standstill in Pimpri Chinchwad and other industrial areas in Pune district including Chakan, Bhosari and Talawade. The majority of skilled and unskilled workers here — from Bihar, Jharkhand, Odisha, Assam and Uttar Pradesh — have headed home following the virus outbreak.

Sales slump

Belsare said the automobile sector had already been witnessing a steep slump in sales and MSMEs engaged in components manufacture and doing job works for the sector had reduced their working hours.

“But now the situation is serious. The Centre must announce a package for MSMEs. Also, the government must take a call on GST, bank loans and advance tax payment. We are not in a position to bear any financial burden,” said Belsare.

Maharashtra accounts for nearly 35.1 per cent of the country’s output of automobiles by value and MSMEs account for more than 80 per cent of the total employment, according to the State government’s industrial policy.

Question of wages

MSMEs owners said the State government has directed them to not cut the salaries of workers, but it would be difficult for them to follow the advice. “Many small industry owners are already facing a major crisis. The inventory and raw material have piled up and OEMs have stopped releasing payments. We are not in a position to pay wages,” said one of the MSME owners.

Industry players say it will take at least two or three months to start the routine work cycle after the government lifts lockdown orders.

Published on March 23, 2020

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