BACK TO THE WALL

INDIA’S 63.4 MILLION MSMEs, ALREADY BATTLING LOW DEMAND, ARE ON THE BRINK OF FORCED SHUTDOWNS THANKS TO A SECOND LABOUR EXODUS, HIGH COST OF INPUTS AND LOAN-REPAYMENT BLUES

- M.G. ARUN & ANILESH S. MAHAJAN

THE CONCERN IN PRAKASH PADIKKAL’S VOICE is quite palpable. Padikkal, 65, owns Havistha Steel, a company in Navi Mumbai that makes equipment and storage tanks for the chemicals, food, and pharmaceutical sectors. Classified as an essential business, Padikkal is allowed to keep work going, exempted from the restrictions in place in Maharashtra, which were just extended from May 1 until May 15. Nonetheless, he says he faces a financial squeeze, with low demand because of various Covid-19 lockdowns across India on the one side and rising input costs on the other. He says prices of one input—mild steel—have shot up from near Rs 40 a kg to about Rs 85 a kg, and that he is stuck with the loss since many of his contracts use fixed prices.