HUBBALLI: It’s been one-and-a-half months since the Karnataka government lifted lockdown restrictions for industries, but less than half of the total micro, small and medium enterprises (MSME) in Hubballi-Dharwad are functional. It is feared that if the situation continues in this manner for a few months, 35-40% of these may shut down operations. Some of them are looking to diversify into sectors which are still in demand.

Covid-19 and the lockdown have dealt a severe blow to MSMEs in the district, which are facing challenges on multiple fronts. The demand and supply chain is broken. As larger industries are not yet functioning to their full capacity, ancillary units are not getting enough orders.With migrant labourers having returned to their native states, the sector is also facing shortage of labour. Supply of raw material and transportation of finished products are other problems.

North Karnataka Small Scale Industries Association president N S Biradar told TNIE that the majority of industries are dependent on Mumbai and Chennai for raw materials. As these cities are caught severely in the Covid crisis, supply of raw materials has almost stopped. Some of them began sourcing their material from Bengaluru, but here too, the situation is turning grim. “My own company’s consignment is stuck in 
Bengaluru as the area is sealed down,” he added.

Ramesh Patil of Patil Electric Works said that with stock of raw material fast depleting, firms have no option but to cut down production. Earlier, production in his firm was in three shifts of eight hours, through 24 hours, but this has now been cut to a single shift. With availability of skilled workforce also a challenge, the show is being run with limited talent, he added.

The automobile industry was hit hard even before the outbreak of the coronavirus pandemic, and has collapsed after the lockdown. As none of the auto giants are utilising their capacity, the large number of auto ancillary units in the twin cities are in deep crisis. “Last year, we were hit by recession and now, Covid-19 has rubbed salt into our wounds. It may take years to recover,” said Nagaraj Divate of Advance Die Cast.

Both the Central and State governments have announced a few measures for their revival, but none of these will benefit this sector. Under the Aatm Nirbhar Bharat Abhiyan, a package of Rs 2 lakh crore was announced for MSMEs, but entrepreneurs have a moot point: where is the need for money when we are not getting orders. Since there is no demand in the market, the industries that are operational are reluctant to function to their full capacity.

While the government claimed that new loans under the Aatm Nirbhar Bharat scheme would not need any guarantee, banks are asking for security, said Biradar. Though the State government has ordered a fixed charge for April, May and June for MSMEs, the Hubballi Electricity Supply Company is not ready to consider it. So, none of the concessions announced are benefitting MSMEs, he said.

Amid all these uncertainties, only those industries engaged in products related to agriculture, pharmaceuticals, medical equipment and food are getting orders, and operating to their full capacity. Since these sectors will be always in demand, some of the industries involved in engineering, auto ancillary and electrical are looking for diversification. Ramesh Patil is planning to venture into the pharma sector.

However, Karnataka Chamber of Commerce and Industry president Mahendra Laddad is hopeful of revival of MSMEs in the district in the next few months. He said the chamber, along with government agencies and large industries like Tata Motors, are mapping existing skilled workforce to make them available for needy firms. They are also holding meetings with bankers to extend financial help to entrepreneurs. While only 35-40 per cent of the industries are functional, the number might increase in the coming weeks, he added.