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60 per cent job cut expected in MSME sector post lockdown
Post lockdown, the critically affected Micro, Small and Medium Enterprises (MSME) sector foresees job cuts of over 60 per cent of the existing workforce in the district.
Around 75,000 workers of the acclaimed pump industry, which has already been struggling due to GST and economic slowdown, may lose jobs as only 40 per cent of the production is likely to resume even after the lockdown comes to an end.
Coimbatore, also known as ‘pump city’, has around 3,000 pump manufacturing units employing around 1.5 lakh workers. “Usually summer is the peak season for the sector. Due to the dip in demand, the units can start functioning only with 40 per cent production capacity after May 3. Thus, more than 75,000 workers will go out of work in the district,” said K Maniraj, president of Kovai Power Driven Pump and Spare Parts Manufacturers Association (KOPMA).
The fall of this sector began soon after the implementation of GST, demonetisation and economic slowdown. “Now, the situation has only worsened further and there may be an exodus of migrant workers out of the city. Of the 1.5 lakh workers, around 10,000 are migrant labourers and they are looking to go back to their home towns when transportation services begin after lockdown,” he added.
Among the industrial sectors, the textiles, too, has suffered an extreme brunt. “The textile sector, which constitutes spinning mills, power loom, handloom and dyeing, will be the worst hit as about 45 lakh people will lose jobs across Tamil Nadu. Such huge job cuts are unavoidable as there may be only around 20 to 25 per cent of production in the sector after lockdown,” said Ashwin Chandran, chairman of Southern India Mills Association (SIMA).
Also, the textile sector may take a few months to revive under the current circumstances as it has to manage with a low quantum of production after the lockdown. “So, our sector will look for cost-cutting measures, including use of electricity, which is a major expense, judiciously to lower expenditures,” he added.
It echos a similar pitiful plight were the 600 odd tiny and small foundries, which employ over three lakh people, mostly migrant workers.
“After the lockdown, the workers were paid the salary for days even when they had no work. Then, for April, the workers were provided with food and accommodation, but they were not paid wages,” said A Siva Shanmugha Kumar, president of Coimbatore, Tiny and Small Foundry Owners Association.
The foundries, which are mostly into casting works, are dependent on other industrial sectors like pumps, textiles and basic engineering industries for orders. “We may get orders only if those industries get back on their feet and increase production. Job cuts are inevitable but the real impact will be known only after all other industries resume operations,” he added.
With COVID-19 leaving brutal scars on the industrial sector, it has become a common demand from industrialists seeking a relief package from the government to overcome the present crisis.