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Pune: Small, medium-sized industries fear prolonged woes as second Covid wave thwarts recovery

Escalating raw-material prices and severe uncertainty in the markets are the main reasons for the slowdown. Most industries believe production and turnover would see a full recovery only after a year.

Written by Parthasarathi Biswas | Pune |
Updated: July 7, 2021 9:12:02 am
A monthly survey of industrial activities in the Pune districts revealed 78 per cent of respondents believe a recovery would happen only after six to nine months. (Representative image)

The ongoing restrictions coupled with the possibility of a third wave of Covid-19 has shaken the confidence of small and medium-sized enterprises and most believe that now it would take at least a year for full recovery in terms of production and turnover.

The industries had seen a healthy period of recovery after the first wave of Covid, reporting pre-pandemic levels of production and employment. But the severity of the second wave and the subsequent lockdowns have halted the recovery. A monthly survey of industrial activities in the Pune districts revealed 78 per cent of respondents believe a recovery would happen only after six to nine months.

Escalating raw-material prices and severe uncertainty in the markets are the main reasons for the delay in recovery. Sandeep Belsare, president of the Pimpri-Chinchwad small and medium-sized industries association pointed out the slowdown in the automobile sector has rendered many of the industries in the area jobless. “During the second lockdown, sales of vehicles dropped. The automobile manufacturers are not in a hurry to produce as they have ample unsold stock. Thus, their vendors and sub-vendors are without any immediate work,” he said.

In the capital-goods sector, the situation has worsened due to the almost 100 per cent increase in raw materials prices. Units that had orders are now stuck with orders priced at previous rates. “At the previous prices, it has become not viable economically for many to complete their orders,” he said.

“There is a clear lack of confidence in the industry. People would not be investing in new cars for a long time. With the advent of electric vehicles, things are going to get worse. Automobile manufacturing would take a hit and there is a real danger of a long-drawn recession. Most of the industries would be forced to lay off people as they would not be able to pay basic salaries even,” said Abhay Bhor, president of the forum for small scale industries.

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