SMEs struggle to take off as lack of liquidity, labour, and demand pinch operations


MUMBAI: Medium and small industries which can be slowly opening doorways face difficulties discovering a agency footing due to liquidity woes, issues in getting uncooked supplies and workforce, and a lack of demand from their purchasers due to low consumption as main city centres stay locked.
As city centres stay inaccessible many manufacturing companies are discovering their provide chains damaged, with suppliers having their warehouses shuttered.

“Mumbai is so important, unless it opens fully it is impossible that industries in the State can fully,” mentioned Sudhir Mutalik, managing director at Nashik-based Positive Metering Pumps. The metropolis has one of the most important steel markets and many suppliers are shut due to containment measures, he mentioned.

Workers in purple zones had been additionally discovering it tough to journey to factories in orange and inexperienced zones. Milon Nag, managing director of Pune-based KK Nag Ltd mentioned, “Our factories in rural areas are open. But our managers and all live in Pune and they are unable to reach factories.”

Meanwhile, there was little hope of employees who’ve travelled to their residence states to return at the very least for a pair of months.

“The entire value chain has to open. The government should make dedicated corridors of transport though the red zones,” mentioned Shreekant Somany, chairman of trade physique Confederation of Indian Industry’s National MSME Council.

Most medium and small trade operators mentioned that they had been merely cleansing their factories and taking inventory of the stock after the top of final fiscal. Production might take time to ramp up as these issues get resolved.

On the demand entrance, whereas orders from abroad markets and important service sectors had been flowing in, demand from different sectors remained subdued, mentioned trade individuals ET spoke with.

“There has to be creation of demand. Everything falls into place when customer goes to the showroom,” mentioned Rishi Bagla, director at OMR Bagla Automotive Systems.

Similar concern was voiced by Nag. “Our business depends on sale of consumer durables and automobiles,” he mentioned.

Companies had been additionally battling low liquidity and confronted challenges paying wages for April when income was negligible. Somany mentioned that measures like elevated working capital limits sanctioned by banks had been but to attain industries due to on-ground administration delays.

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