The economic slowdown, especially in the automobile sector, may give the ruling BJP a fight in several constituencies surrounding Jamshedpur out of 20 seats that go to the polls in the second phase of Jharkhand Assembly elections on Saturday.
As hundreds were left unemployed over the last few months after auto ancillary companies in the city known informally as Tata town reduced production amid sliding demand, unskilled labourers have been hit the worst.
According to industry insiders, nearly 800 auto ancillary units were heavily dependent on Tata Motors and Tata Steel, both contributing significantly to the economic activity in the region.
In its July-September quarter results, Tata Motors said its profitability was “impacted by adverse mix from steep decline in M&HCV (Medium and Heavy Commercial vehicles) volumes and loss of operating leverage”.
The Jamshedpur unit of Tata Motors makes medium and heavy commercial vehicles and outsources work to ancillary units, which manufacture components of brakes, suspensions, axles, electrical parts, body and chassis, and various other components.
Firoz and Purushottam Lohar, who worked as welders, Mohammad Imran, who runs transport business, and Shashi Charan Mahapatra, who worked as a driver at an ancillary unit, are all jobless now. “This is the worst I have seen. We are managing somehow, hoping this is a temporary phase,” Firoz said.
Imran said he is unable to repay loans for the vehicle he had bought to unload goods.
Labourers from at least five constituencies – Ghatsila, Potka, Kharswan, Saraikela, Chaibasa —- come to Jamshedpur regularly for daily work.
While there is palpable angst against the BJP government of Raghubar Das, the local MLA from Jamshedpur East, it is not clear from those looking for work whether that anger will reflect in the polls.
“Pet mein kuch rehega tab na vote denge (we cannot vote on empty stomach),” reasoned Purushottam Lohar, who comes to Jamshedpur from Kharsawan looking for work, spending Rs 20 every day, quite a sum for him now. He was rendered jobless four month ago.
Like Lohar, hundreds of men and women from areas such as Sini, Potka, Saraikela come to Imli Chowk in Adityapur, neighbouring Jamshedpur, early each morning to look for a day’s work, which many waiting there agreed has become scarce of late.
Imli Chowk, incidentally, is less than 3 km from the venue where Prime Minister Narendra Modi addressed an election rally in Jamshedpur on December 2. Modi sought votes for a stable BJP government in the state and stated his intent for industrialisation.
Industry-watchers, however, feel the slowdown, and the consequent layoffs and jobs losses, will leave an impact in the polls.
TMF Private Limited, which manufactures axle spindles and supplies to Tata Motors, has seen business slide 80 per cent over the last five months. The company’s owner, Rupesh Katriar, who is also the state vice-president of Laghu Udhyog Bharati, an association of small and medium-scale units seen as being close to the RSS, said lack of demand has impacted output. “Then there is the liquidity crunch faced by businesses – despite assurances, loans are turned non-performing (NPA) or stressed assets. We have fixed costs which needs immediate attention, so many people are not able to pay loans immediately,” Katriar said, adding that this issue may affect BJP electorally.
According to Ashok Bhalotia, president of Singhbhum Chamber of Commerce and Industry (SCCI), which represents about 600 micro, small and medium-scale enterprises and 1,200 traders, loans of “at least 20-25” member-companies have become NPAs.
Bhalotia said, “How does any midsize business repay loans amid such slowdown? More than 10,000 labourers have been laid off.”
He also said multiple meetings with the government has had little result. “The trader community is unhappy; this will reflect on the election,” he said.