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Saturday, April 10, 2021

501 companies shut down in Chandigarh between April ’20 and February ’21

On Monday, Union Minister of State for Corporate Affairs Anurag Thakur had presented the data in the Lok Sabha in a written reply, in response to a query on state-wise data of registered companies that have gone out of business during FY2020-21.

Written by Hina Rohtaki | Chandigarh |
March 10, 2021 8:41:29 am
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As many as 501 companies voluntarily wound up operations in Chandigarh between April 2020 and February 2021, as per a data presented in the Parliament during the Lok Sabha session.

On Monday, Union Minister of State for Corporate Affairs Anurag Thakur had presented the data in the Lok Sabha in a written reply, in response to a query on state-wise data of registered companies that have gone out of business during FY2020-21.

It was said that more than 10,000 companies closed down voluntarily in India between April 2020 and February 2021under Section 248 (2) of the Companies Act, 2013.

The shutting of 501 companies in Chandigarh spells a huge setback for the city.

A Chandigarh resident who shut his company, requesting anonymity, told The Indian Express, “I used to run a cloud kitchen where I supplied to local chains having multiple outlets in the Tricity. The business was good and had the potential to flourish but it came crashing down due to Covid-19.”

He added, “The chains, whose outlets I was providing food to, shut down many of their outlets due to dwindling revenues brought about by lockdown-related restrictions which had adversely affected business. Some of the outlets were shut down as they could not generate enough revenue to meet expenses, with rental costs a huge contributor to the pain. The fall-out of shutting down of an outlet is not limited to that outlet alone and has a spiralling effect. It affects different players at different levels of the business chain, including players like me who were dependent on the business of stores which we were catering to.”

The resident also suggested, “In such times, if the UT Administration had brought in measures such as paying full or part rentals or helping manage salary costs by exempting it from taxes etc, then a business like mine could have probably survived.”

An official from the PHD Chamber of Commerce said that many of them whose offices were on lease shut down their businesses during Covid-19 lockdown as the lease money had piled up and there was no revenue. “They were being asked for the rentals and since in lockdown months it piled up, with businesses not making any money at all, there were no choices left with some of them,” said the lady official with PHD Chamber of Commerce.

Many of the firms that had wound up their operations were start-ups.

Several Industries shift from Chandigarh

Naveen Manglani, Chairman of Chandigarh chamber of Industries said that several industries have even shifted their operations from Chandigarh to other regions.

He said that one of the biggest drawback for the entreprenuers is that the title of plots are not clear in the Industrial area. “It needs to be converted to freehold from leasehold to retain businessmen. It is only then that the UT will attract new companies. Moreover, the locking period of 15 years for the transfer is long over. However, the administration has no policy of freehold,” Manglani said.

He added, “Moreover, the Chandigarh Industrial Policy of 2015 has not been implemented, so far. The stakeholders have been regularly following up. Even after approval from the Committee set up for this purpose, the issue is in the lurch.”

He said that the UT Administration needs to introspect, and take the stake holders into confidence. “The reasons for the low rating of Chandigarh in ease of doing business and ease of living index is also this. The barriers and road blocks have to be removed.”

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