Availability, cost of labour problems are going to hit industry

With migrant workers off, how to make India self-reliant?

M K Tayal:Prime Minister Narendra Modi’s grandiose announcement of a Rs 20 lakh crore package to make self-reliant India fails to enthuse migrant workers who are demanding increased salaries and perks to stay back which is bound to phenomenally increase production cost thereby make goods and services extremely expensive. As the majority of the workforce has moved from industrial locations, those who have stayed back are dictating their terms to the factory owners and are asking for increased salaries and perks.

A causal to semi-skilled labour getting Rs 500 to 800 is seeking double the amount. “Firstly, most of the labour has gone back. Those who have stayed back are demanding anything between 1,200 to 1,500. No factory owner or manufacturer is going to pay from his pocket. Naturally, with the cost of production going up, it will be passed on to the end consumer,” says Amit Tayal, a MSME entrepreneur, who operates an industrial gases unit in Mumbai.

Amit Tayal

The workers are also demanding that they get extra allowances for food. “Now they are dictating terms,” Amit added.

However, Delhi-based entrepreneur Nalin Gaur, who runs a factory making paper cups, feels that it is too early to say if the labour is going to return anytime soon. “We will have see how the labour shortage is going to impact the salaries of the workers. I am planning to start production, but since raw material supply is yet to resume, the production is yet to commence.”

Nalin Gaur

Regarding the Modi’s package, Nalin is adopting a to wait and watch approach. “The Prime Minister has made a big announcement. But if the existing manufactures are not able to sustain themselves, how are the new players going to survive. Besides if the cost of production increases, demand will decrease. If a paper cup cost goes up, it will impact production and sales,” Nalin adds.

Ved Prakash Tiwari

However, salaries of labour would come into play after availability, as availability is going to be a big factor, feels Ved Prakash Tewari, director of Keshav and Merc, manufacturing vibro machines in Kanpur and Ghaziabad in Uttar Pradesh.

“Currently work force is not available. Salaries are going to go up or not will come later. First, there has to be availability,” says Tewari.

“The industries are being told to work with 33 per cent work force. This will reduce production. And at present there is less demand. So, demand and supply equate as of today,” Tewari adds.

Pratik Gupta

Pratik Gupta, director of Krishna Industries, who deals in raw material and owns a paper factory in Bawana, says demand will play a crucial role. “Unless, the markets are open and there is demand, only then we can commence production. So, first, the markets have to open,” says Prakit who is keenly observing the exit strategy of the Government.  

But the government is planning to gives loans to MSMEs. Not everybody is going to avail the loan facility though it is a big relief.  The government is planning to give loan in relaxed conditions with a moratorium of one-year interest wavier on a loan for a four-year period. “If MSMEs are given relaxation and not pay interest or pay after one year; that period of one year should would be a big relief,” Tewari says. The construction sector is going to take the biggest hit of mass migrant workers exodus from cities.

Rakesh Rajput

The casual labourers have left their work places. Rakesh Rajput, who has worked in many movies like Maa Tujhe SalamBig Brother etc, also is a director of a construction company. Rakesh said since the migrant workers have left, to get them back would be a difficult proposition. “Most of the migrant workers have left big cities, particularly from the National Capital Region of Delhi. Availability and cost are going to be a big factor.

Jagadish Pant

The PM on Tuesday announced Rs 20 lakh crore special economic package for the country to be ‘self-reliant’ and deal with COVID-19. “I announce a special economic package today. This will play an important role in the ‘Atmanirbhar Bharat Abhiyan.’ The announcements made by the government over COVID, decisions of RBI and today’s package totals to Rs 20 lakh crore. This is 10 per cent of India’s GDP,” said Prime Minister Modi in his address to the nation. “We welcome the announcement of the Rs 3 lakh crore package for the MSMEs. But how will it be implemented. That is the bigger question,” remarked Jagadish Pant, journalist turned entrepreneur.

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