As Maharashtra stares at about 40 per cent expected revenue shortfall, pressure is mounting on the State government to facilitate the resumption of industries and businesses if the lockdown ends on May 3.
Even as Chief Minister Uddhav Thackeray has announced that the government will announce a comprehensive plan for step-by-step resumption of industrial and business activities in the State, industry players are seeking concrete steps so that operations could start without any further hindrance.
With Gross State Domestic Product (GSDP) of ₹24.97-lakh crore ($387 billion), Maharashtra is the largest economy in India, accounting for 15.01 per cent of the country’s GDP in 2017-18. The economy of Maharashtra is mainly driven by manufacturing, finance, international trade, technology, petroleum, fashion, apparel, gems and jewellery, IT & ITeS, and tourism.
The industrial ecosystem in the state for various industries including automobile, ESDM, pharmaceuticals and chemicals, engineering, FMCG, textile, food processing, logistics, cement and the steel industry and IT & ITeS are at a standstill because of the lockdown.
According to reports, about 4,500 industries have resumed operations with the government’s permission and following all norms. However, majority of them are unwilling to re-start operations and are waiting for clear directions from the government after May 3. As of now, about 96,000 workers have joined work, according to reports.
Nationalist Congress Party (NCP) President Sharad Pawar in a social media interaction on Thursday said that along with the Covid-19 crisis the State is also facing a huge economic crisis. He added that concrete steps must be taken so that industries, businesses, and agriculture works restart in the state.
“There is an expected revenue shortfall of ₹1.4-lakh crore, that is, 40 per cent of the State’s annual budget revenue estimates. The financial fabric of the state stands completely disturbed. There would be more job losses and unemployment will rise,” said Pawar. He insisted that it was high time for the Centre and State to ensure the industry and business cycle is smoothly back on track.
Arun Firodia, Chairman of Kinetic Group has said that geographical relaxation of lockdown is not practical because the supply chain is across various states, districts, and zones. Firodia suggested that it would be better to relax it sector by sector and industry by industry.
“We should insist that all the components of the supply chain must adhere to testing / social distancing norms and all employees in the supply chain stay on site. Migrant workers should be invited back and tested before they are allowed to resume duties. A timetable for opening the various sectors should be announced so that sectors/ industries can start planning and organising which itself will take two weeks in each sector/industry,” he said.
Firodia added, “That will allow migrant workers to plan their return and industries can give schedules to their vendors and dealer showrooms can open. Even in hot spots, industries could be asked to operate if the employees are allowed to stay on premises and give them time to make arrangements. I think, most of the industry is not expecting to go full swing from day one.”