Updated: July 7, 2021 9:03:58 am
The spectre of a possible Covid-19 third wave and the ongoing restrictions have shaken the confidence of small and medium scale enterprises. Most industries now say it would take more than a year or even more for a full recovery in terms of production and turnover.
Last week, in the monthly survey of industrial activities in the district conducted by the Mahratta Chamber of Commerce Industries and Agriculture (MCCIA), as many as 78 per cent of the respondents said recovery could take 6-9 months. The sector had seen healthy recovery after the first Covid-19 wave with majority of the enterprises reporting pre-Covid levels of production and employment. But the severity the second wave and the lockdown associated with it had brought this recovery to a halt.
Sources blamed escalation of raw material and severe uncertainty in markets for the prolonged delay in recovery. Sandeep Belsare, president of the Pimpri-Chinchwad Small and Medium Scale Industries Association, said the slowdown in the automobile sector has rendered many SMEs in the area jobless. “During the second lockdown, sales of vehicles had tanked, so the automobile manufacturers are not in a hurry to produce as they have ample unsold stock. So, their vendors and sub-vendors are without any immediate work,” he said.
In the capital goods sectors, the situation is exacerbated due to the almost 100 per cent increase in prices of raw materials. Units that had orders are now stuck with orders priced at the previous price. “At the previous prices, it has become non-economical for many to complete their orders,” he said.
Abhay Bhor, president of the Forum for Small Scale Industries, said it could take one-and-a-half years before a full recovery. “There is a clear lack of confidence in the industry. People will not invest in new cars for a long time. With the advent of electric vehicles, things are going to get worse,” he said. Automobile manufacturing, he added, will take a dip and there is a real danger of a long drawn recession. “Most of the industries will be forced to lay off people as they will not be able to even pay the basic salaries,” he said. With vaccinations being slow, Bhor said it will take some time before industries see a good revival.
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