With production in over 95 per cent of Maharashtra’s registered factories — 34,944 out of 36,623 — grinding to a halt, the state’s fiscal managers had already projected a loss of income to the tune of Rs 42,000 crore till April 14.
Maharashtra Industries Minister Subhash Desai on Tuesday said the state’s plan for resumption of industrial operations will be ready in a “day or two” and that the proposal would be placed before Chief Minister Uddhav Thackeray for approval.
He further said that the state was awaiting the Union government’s guidelines that would be issued on Wednesday. However, it is not clear how many of the stranded workers can be absorbed if industries reopen, as it will only be a selective resumption, the minister told The Indian Express.
“We are planing to allow industrial operations in 29 districts that fall in green zone, the districts with zero cases, and orange zone, the district which has reported up to 15 cases but are considered safe,” Desai said.
Industrial operations will not allowed to start in “red zones” —the districts with more than 15 cases — and the “red plus” zones, which include 12 municipal corporation areas like Mumbai, Pune, Pimpri-Chinchwad, Kalyan, Dombivili and Mira- Bhayander. “We will not allow any activity in these two categories,” said Desai.
Desai said that there could be many challenges in resuming industrial operations in the state. “Even if we allow resumption of industrial operations, it does not mean that all the industrial units or factories will start their operations immediately. The industries may face issues related to raw materials and labour availability among others,” he added.
Maharashtra has sought a Rs 25,000-crore financial assistance package from the Narendra Modi government to tide over the COVID-19 crisis. In a communication to Union Finance Minister Nirmala Sitharaman last week, state Finance Minister Ajit Pawar had also demanded an immediate release of Rs 16,651 crore in central grants due to the state.
With production in over 95 per cent of Maharashtra’s registered factories — 34,944 out of 36,623 — grinding to a halt, the state’s fiscal managers had already projected a loss of income to the tune of Rs 42,000 crore till April 14. With Prime Minister Narendra Modi extending the lockdown till May 3 on Tuesday, a senior bureaucrat in Maharashtra’s finance department said that the loss in potential revenue will mount further.
As on Tuesday, statistics collected from the state-run Directorate of Industrial Safety and Health showed that only 1,679 of the state’s 36,623 registered factories were currently operational.
The mass closures have forced 27.51 lakh factory workers to sit at home. The manufacturing sector, along with services sector, make up for 88 per cent of the economic activity in Maharashtra, which alone contributes nearly 15 per cent to India’s GDP.
In absolute numbers, the state suffered a loss of Rs 27,000 crore in potential revenue in March alone, resulting in a big shortfall in income collections in 2019-20. In March 2019, statistics show that the government had earned Rs 42,000 crore, most coming through tax collections. In contrast, the earnings this March were just Rs 17,000 crore.
Similarly, last April, the state had earned Rs 20,000 crore. While the state was hoping to mop up Rs 4,500 to Rs 5,000 crore in taxes through resumption of some form of economic activity post April 14, a prolonged lockdown will deepen the losses. For March, the loss of potential revenue was Rs 18,000 crore for the state’s Goods and Services Tax, Rs 1,600 crore in stamps and registration fees, Rs 2,000 crore in excise duties, and Rs 500 crore in vehicle registration
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