Travel restrictions coupled with client confidentiality clauses and work-from-home advisories due to COVID-19 has resulted in low productivity and impacted the service delivery models, according to a report of the Bangalore Chamber of Industry and Commerce (BCIC).
The report, which was submitted to the State government, said COVID-19 induced lockdown severely impacted business across industries owing to disruptions in supply chains, reduced global and domestic demand, decline in growth of investments, and stress on the banking and financial sectors.
The report ‘Opportunity in the times of COVID – Positioning Karnataka as a preferred investment destination’ prepared with support from Deloitte, noted 228.2% rise in unemployment, 60.1% decline in export of goods, and 7.3% decline in export of services in India due to lockdown and restrictions in travel and movement of goods.
Commenting on the report and low productivity, BCIC president T.R. Parasuraman said: “Because most of the employees operating on the shop floor in industries were from outside Bengaluru, they went back to their natives places during lockdown. Most of them did not return owing to lockdown restrictions and fear of COVID-19 and this led to problems in starting manufacturing operations.”
Nearly 60 to 80% of the operators on the shop floor were hired on contract and they were from different parts of Karnataka. “When the lockdown was called off, they (operators) were not allowed to stay (accommodation) in the same place because of fear of COVID-19. This resulted in disturbing the production process in many industries and companies. When alternative manpower is deployed, they are not trained…. all these led to low production,” he said.
Alternative hubs
The report says that it is imperative for the State to develop alternative economic hubs beyond Bengaluru. With more than 15,000 acres industrial land available in tier-II and tier-III cities such as Vijayapura, Ballari, Dharwad, Shivamogga, Hassan, Ramanagaram, Tumakuru, Chickballapur districts, BCIC said there is a necessity of shifting labour intensive industries out of Bengaluru ensuring geographical inclusive development.
The report recommended encouragement for adoption of industrial training institutes by industries as part of the corporate social responsibility initiatives for skilling initiatives and to ensure supply of industry-ready professionals in line with industry requirements. “Limited partnership between industry and skilling ecosystem (ITIs/polytechnics) is resulting in absence of industry-ready professionals,” the report said. Noting 4-13% higher energy cost for industries in Karnataka vis-à-vis competing States, it suggested to the government to reduce power purchase costs by scaling-up low-cost renewable power sources such as solar, wind. It also called for rationalisation of tariff cross-subsidisation to reduce tariff rates for industrial customers.