Industry And Cluster | News & Insights

MSMEs operate at 50 per cent capacity.

Published: September 29, 2020
Author: TEXTILE VALUE CHAIN

Even as unlocking is happening in phases, the micro, small and medium enterprises in the industrial areas are still operating at about 50 per cent of their capacities. In addition, the companies are also seeing a shortage of manpower as many of the labour who left due to cover are yet to come back. The companies are now managing with about 50 per cent staff. However, the bigger problem is the lack of orders for them. “The sentiment is improving but it will take some time for the production to come back to pre-covid levels. The companies have exhausted their cash reserves and are now looking up to the government for further measures,” said K Sudhir Reddy, President, Telangana Industrialists Federation. According to him, the measures so far announced were limited to extending loans. “Availability of loans is one aspect. But they should be available at a lower cost. The rate of interest should be reduced. It currently averages 12-13 per cent and this needs to come down,” he said.

While the Government is keen on attracting companies that are exiting China to India, the high interest rates are a challenge for the industries willing to look at India, he said adding that the domestic companies too are seeking steps to lower the cost of doing business. Many companies are not able to operate in two shifts due to the sagging demand. The companies are maintaining an inventory corresponding to the demand.

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