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Job loss threat looms over MSMEs, say industry sources
The automobile hub of India is heading towards a major job loss disaster as the small and medium manufacturing sectors are badly hit due to coronavirus outbreak. According to industry sources, job loss has started seeping into the industrial corridors of Chennai as the small and medium sector companies are finding it difficult to pay their employees.
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According to KE Raghunathan, former president, All India Manufacturer’s Organisation (AIMO) there is an immediate need for the state and the Centre to address the issue as more livelihood is under threat along with the lives due to coronavirus outbreak. The ground impact information gathered from various sources points that over 22 per cent of the over 75 million MSME’s (micro, small and medium enterprises) units in India will be shut if the lockdown in cities extends beyond 4 weeks and a staggering 43 per cent will shut shop if the panic extends beyond 8 weeks. He also demanded a Central relief package of Rs 1,000 crore corpus to immediately bale out MSMEs.
“There are hundreds of MSMEs in Guindy, Saidapet and Ekattuthangal area coming under my constituency. The units have gone through their most difficult times in the last 3 years due to the demonetisation, GST and economic slowdown. Now the coronavirus impact is like the last nail in the coffin box,” said former mayor and Saidapet legislator M Subramanian, whose constituency covers the Guindy Industrial Estate.
The state and the Centre are clueless on job loss after the COVID-19 outbreak. When issue of job loss is raised in the Assembly by our party leader Duraimurugan, the Chief Minister said there is no closure of MSMEs, which is factually wrong. The small units are dying as the small entrepreneurs are not able to pay their dues and salaries, Subramanian added.
“The real estate and auto sector to which most of the MSMEs are connected in Tamil Nadu are also bleeding. In the COVID-19 crisis, the new age concept of work from home is hugely irrelevant for the MSME sector,” explained Raghunathan.
The MSME owners have already started facing the huge financial burden of unpaid salaries, unpaid EMI’s and finally closure of such operations with job loss, Raghunathan added.
“The job loss has already set in at Guindy and Ambattur industrial estates and the number of vehicles that arrive for service has dwindled by more than 40 per cent and the situation is alarming,” said S Kesavan, a manager with leading car service showroom in Ambattur. The supply of certain spares from China is also hitting the industry badly, he added.
No closure of firms or loss of employment, informs EPS
Chief Minister Edappadi K Palaniswami on Thursday said that there was no closure of small and medium enterprises in Tamil Nadu leading to job loss. Replying to DMK leader Duraimurugan in the state Assembly who stated that coronavirus outbreak has affected small companies leading to job loss, the Chief Minister said that the Labour Department secretary was monitoring the situation. As of now, there is no closure of micro and medium enterprises and there is no question of job loss. The jobs are safe, and the Labour Department has passed the necessary precautions in this regard.
Besides, the state Industries Department is also monitoring the situation. Guidelines to protect the workforce and the companies have already been issued to the industries through the state secretary. There is no need to panic on the issue, Palaniswami assured the Assembly. According to Labour Department sources, the state has passed circulars to the companies insisting to adopt work from home concept wherever applicable and advised to implement biosecurity measures in the companies and factories so that the virus outbreak is curtailed. The advisory also recommends the factories to provide disinfectants and subject workers to periodic medical tests, sources said.
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