About 30,000 units manufacturing auto mobile spare parts and about the same number of agro based industrial units have shut shop post-demonetisation with orders drying up. About 1.5 lakh MSME units (all segments) lined up along Jeedimetla, Balanagar, Shahpur, Maheswaram, Adibatla, Quthbullapur, Dulapally, Kukatpally and Cherlapally are on verge of shutting down operations after facing huge losses over the past one month. Also small players in retail textile, food processing and plastic industry are also bearing the brunt of demonetisation.
Most of the units manufacturing auto mobile spare parts in the city cater to show-rooms and shops within the city. While the units are not ancillary units that supply to any mother companies but they manufacture spares that work equally well as original parts. Since the `micro’ industry completely runs on cash, be it placing of orders, transportation, payment to workers or purchase of raw materials, units have seen between 50 to 70% loss of production over the month. “I am unable to pay to my labourers as none of them have bank accounts. They are refusing to come to work, forcing me to suspend operations,” said Shaik Hussain, accessory manufacturing unit owner from Balanagar.
Despite the announce ment that banks can give upto Rs 50,000 to commercial establishments, banks are not giving that amount. “The worst hit among the lot are the micro units with turnover of Rs 10 lakh to Rs 50 lakh. Also MSMEs across segments are hit badly. In most of these units, the workers are hired on a daily basis,” added Gowra Srinivas, Senior Vice President, Federation of Telangana & Andhra Pradesh Chambers of Commerce & Industry.
Dealers in spare parts and industrial machinery are unable to meet deadlines and have even attracted heavy fines. Moiz Ahmed of 2 M Trading and Spare parts who deals in local as well as imported spare parts said, “With production at the manufacturing units dipping, the supply has gone down. Moreover, even the transportation network which operates only on cash is hit. In the whole process, I am unable to supply to my clients. I have not only lost a number of orders but even reputation in the process.”
Source: Times of India
