The last 15 months have been a non-stop downhill slide for Ananya Bahl, who runs a small unit manufacturing mobile chargers in Delhi’s Samaypur Badli industrial area. The second-generation entrepreneur’s woes started last March after the nationwide lockdown due to the Covid-19 pandemic. That meant the 27-year-old couldn’t collect his dues from pre-Covid sales. His costs spiralled after the lockdown was lifted. Now, as the second wave ebbs with the possibility of a third looming, Bahl’s business has all but been run into the ground.
“There is no demand, due to which manufacturing units have been impacted. Compared with March 2020, output has plummeted by almost 80-90 per cent,” says the second-generation entrepreneur. “Even if you set aside the generic cost of transport, specific raw materials related to my sector have seen a massive price rise on account of the import ban from China. Prices of raw materials such as charger cabinets, copper wires, and circuits have gone through the roof,” he adds.
On top of that, he is struggling to access capital under a government scheme for small businesses. Bahl says his multiple trips to a public sector bank for a collateral-free loan worth ₹30 lakh have been futile. He concedes that the fear of a third wave has stifled the prospects of recovery in the unorganised sector and made people wary of making investments.
Bahl’s story will find succour among many of the 6.33-crore micro, small and medium enterprises (MSME) that dot the country. Their combined worth was ₹60 lakh crore and they accounted for at least 30.27 per cent of India’s GDP in 2018/19, according to the Ministry of Micro Small and Medium Enterprises’ 2020/21 annual report. Not to mention the 11 crore-plus jobs MSMEs have created, according to the 2015/16 National Sample Survey. But all of that is under siege now.
MSMEs are in dire straits as an economic slowdown has added to their litany of woes such as limited access to capital, high raw material cost, supply chain disruptions, labour migration and overdue collections. As a result, several firms haven’t been able to resume operations even after state-specific lockdowns were eased after the second wave. Those that have restarted were able to do so after either curtailing their operations or their workforce.
Roughly two out of every three respondents to a survey — conducted jointly by the Federation of Indian Chamber of Commerce and Industries (Ficci) and Dhruva Advisors in June — say the MSME sector has faced the brunt of the second wave of the pandemic and needs immediate relief.
Sanjay Aggarwal, President of the PHD Chamber of Commerce and Industry (PHDCCI), an industry body that has a large representation from MSMEs, explains the hurdles the sector faces. “Firstly, the MSME supply chain is completely disrupted and they do not have the capacity to handle it. Secondly, a spike in commodity prices translates into higher working capital requirements. With depressed demand, margins come under stress. Thirdly, there is a huge pendency in both government as well as PSU payments to MSMEs,” he says. His conclusion is dire. “All these factors combine to give a death blow to small industries.”
And this is for the firms that made it as far as this March. About 70 per cent of small businesses were disrupted from March to August last year, and 40 per cent until February this year, according to a survey by US commercial data firm Dun and Bradstreet. There is a very real fear that a large number of MSME entities may permanently shut shop after the debilitating effects of the second wave of the pandemic.
That fear is palpable in the industrial hotspots in the country, from Bawana in outer Delhi to Chandrapur MIDC in Maharashtra, and from Kovai in Tamil Nadu to South Delhi’s small industry cluster of Okhla.
Continue reading your story on the app
Continue reading your story in the magazine
‘THE CLOCK IS ALWAYS SLOW; IT IS LATER THAN YOU THINK'
ANUJ PODDAR, EXECUTIVE DIRECTOR, BAJAJ ELECTRICALS
THE WELLNESS JAUNT
EARLIER THE NICHE OF FOREIGNERS, WELLNESS TOURISM IS GATHERING PACE AMONG INDIANS WHO ARE TURNING TO AYURVEDA, YOGA AND NATUROPATHY FOR HOLISTIC HEALTH.
Reading to Lead
STOPPED IN ITS TRACKS
THE INDIAN RAILWAYS’ PLAN FOR PRIVATE PASSENGER TRAINS GARNERED ONLY TWO BIDS, THWARTING ITS PLANS TO SHORE UP ITS FINANCES. WHAT WENT WRONG AND WHAT IS THE WAY AHEAD?
NJ GROUP FORAYS INTO RULE-BASED INVESTING
Not content with just being India’s largest mutual fund distribution firm, NJ Group is now venturing into the asset management business with a novel mutual fund built on rule-based investing. Although there are many bank-sponsored mutual fund houses, this is probably the first instance of a pure distribution house launching its own mutual fund house.
BELLING THE BULL
INVESTING IN HIGH-RISK STOCKS FOR QUICK GAINS DURING A BULL RUN MAY WORSEN YOUR FINANCIAL HEALTH. HERE'S A GUIDE TO INVESTING IN A BULL MARKET.
HARSH TRUTHS, HARD JOURNEY
Harsh Mariwala and Ram Charan trace Marico's rise from relative obscurity to a company taking on multinational Goliaths, and winning.
Netflix's India Push
The global entertainment major has completed five interesting years in India, focussed on its premium positioning. What lies ahead?
'WHEN YOU HAVE THE BEST CONTENT, YOU CAN GROW A LOT'
OVER THE PAST two decades, Founder and Co-CEO Reed Hastings has shaped Netflix from being a DVD rental service to a $270-billion market cap entertainment powerhouse, in the process of transforming how the world consumes video entertainment.
The Shape Of Things To Come
The digital revolution will give indian stock indices their own new-age powerhouses
THE CAB RIDE
I sat in the cab on my way to the airport as the driver zoomed over Delhi’s wide roads. The sun was rising over the horizon as a new day dawned – quite literally, as election day approached the city of Delhi.
The Birds of Kanha
RAJESH MENON is a photographer from Delhi, who specializes in images from nature. Here he shares some of the beautiful birds of Kanha Shanti Vanam, the 1300 acre property outside Hyderabad, India, that is the international headquarters of the Heartfulness Institute. It is also a green sanctuary.
ANIRUDH DHANDA explores the way memories trigger heartfelt events and people from the past, and remind us of situations that evoke emotional responses. Is this what being human is all about?
El derecho a estar segura
Desde que un ataque horrendo conmocionara a India, las mujeres de ese país han demandado -y obtenido- más protección frente al acoso y el abuso en espacios públicos,
Building A Sporting Nation
Marathons are changing the shape of the nation. We ask the brains behind the Delhi and Mumbai Half Marathons, how exactly.
The Filipino entrepreneurs' most significant role
This sounds cliché, but the most significant role of Filipino entrepreneurs, come hell or high water or COVID-19, has remained the same: Entrepreneurship is geared toward nation-building.
Biggest sero-survey to be conducted in 280 wards
Bowlers script Delhi's 33-run win over Rajasthan Royals
With the win, the Capitals returned to the top of the table
बैड ड्राइवरों पर दिल्ली ट्रैफिक पुलिस की पैनी नजर
जल्द जारी करेंगे 100 लोगों की लिस्ट