Lockdown Relief, or yet another Hurdle? Most MSMEs continue to shutdown Manufacturing

“Considering the very stringent rules laid down as per the Guidelines issued by Ministry of Home Affairs dated April 15, 2020, the industries in GIDC, Nandesari have decided to closed down the manufacturing operations of Essential/Non-Essential Pharma products till May 3, 2020”, reads the letter sent by Chairman Babubhai Patel to the District Collector, Vadodara. The letter dated 20th April, 2020, also states that four Pharma units had already closed the operations by 5:30 pm due to very stringent and unmanageable guidelines.

This is not just the plight of industries in Nandesari Industrial Estate in Gujarat, but the same sentiments have been airing across the country, where manufacturing activities followed with guidelines are allowed. We believe that necessary steps should be taken, and the government has all the right to ensure the spread of COVID19 is stopped. But the government should also understand the ground realities, engage with MSME associations, State Governments and come out with a working arrangement, without diluting the social distancing, restricted movement of people, vehicles, etc.

Are all government offices equipped with automated sanitation systems? Is every Government office provided with thermal screening equipment for their employees? Are all government employees given accommodation within their office premises?, aired Sunil Gavali, a manufacturer from Pune, who is keeping his factory shut, not just because of the guidelines, but to ensure the safety of his employees which at any cost he doesn’t want to put in danger?

A manufacturer should introspect before taking any decision, adds Mr. Gavali. Before starting any unit, our conscience should answer the only question – is my product is life-saving, essential service? Is it absolutely required to start the unit? Is the supply chain of our customers hampering? Can we wait till 3rd May?

Announcing Lockdown2.0, PM Modi informed that the government will bring relaxation for restarting some business operations if the people of the country are ready to follow the strict guidelines. After the announcement, the Ministry of Home Affairs came out with guidelines for different sectors, where some of the essential and non-essential manufacturing sectors were allowed to resume operations from 20th April 2020.

Arun Popli, Chairman of Okhla Chamber of Industries want the government to look into the current situation of MSMEs and support by giving accurate measures. 

It was a great relief for MSME's under the green and orange zones to restart their operations after almost 25 days of lockdown. With no cash flow, paying salaries, managing fixed expenses have been tough enough as all their industrial activities had come to a standstill. Following the guidelines became a challenge for the MSMEs rather than a relief, forcing some of them to keep their activities shut till the 3rd of May. 

Some of the guidelines laid by MHA strictly warned the manufacturing units to adhere to the social distancing norms. Establishments will have to make arrangements for the workers to stay within the premises as far as possible and/or adjacent buildings and implement the standard operating protocol. Commutation of workers to the workplace shall be arranged by the employers ensuring social distancing along with other sanitization facilities.

Bhushan Bhatt, Director of FRP India says, "By and large SME's who operate in limited space and resources are majorly unable to fulfill these aspects of guidelines. Arrangements to stay inside the company or alternatively arrange the pickup drop. Also, unclarity from the customer regarding pending orders and new to follow leads to hold the operation for a while."

ER Parthipan, Founder & CEO of JPJ Technologies, Chennai is of the opinion that the government should come with several measures to stabilize the insecure Indian manufacturing MSMEs. Clearing pending payments of govt orders/contracts, returning withheld deposits in contracts, postponement of GST until normalcy, offering incentives to GST payers who want to support the government by paying now, etc.

We were able to reach K Palan, Vice President of Nandesari Industries Association, to know more about the letter shared by their President, and he stated, “maximum workers come from remote areas on their bikes or scooters but, as per the guidelines laid by MHA, a small scale industry cannot afford to ply buses with 30-40% occupancy, covering villages within 20 km of the radius.”

He further informed about his concerns that if any worker is found infected with COVID19 then an FIR will be lodged against the owner/ operator of the premises under IPC section 188, 269, 270, and 271, which is completely unfair as the company is unaware of the places the workers visit or who they meet.

He added, “The small scale industries which carry manufacturing activities in 1000-1500 square meters plot, cannot make arrangements for the employees to stay in the factory premises. In addition to that, they have to arrange for even separate lockers, build more toilets, have to implement frequent sanitization facilities, laundry facilities, etc, which cannot be afforded at the moment.”

Manpreet Singh Sachdeva from Elite Material Handling, an MSME entrepreneur from Bangalore, has a solution to this. He says, “The guidelines are very general right now, based on what kind of industry is it. 

One of the major industrial cities in the country, Pune is completely under lockdown. Some industries which got permission were also informed to close their operations due to the vulnerability that prevails across the city. Mumbai, the business capital of the country is the worst hit, and it may take some time for the authorities to get the COVID19 spread curve to flatten.

Manish Kothari, Managing Director of Rhino Machines, Vadodara, and also the Mission Director of Empretec said that this is a typical state of affairs where they are working in Silos. “What I see is something very different, the lack of trust, transparency between the administration and industry is clearly visible. The ideal situation would be entrusting the industry associations to partner the administration informing localized and specific policies”, adds Mr. Kothari.

Manish Kothari states that if the intent of all is the same – to save lives, could we not come together, have faith in each other rather than the gross mistrust which exists across us. His advice is to use this time to analyze why we are thinking and acting this way, and how we can come together as one unit.

This is the time for collaborative action, where the entire country and its complete mechanism should work on a single mission of arresting the COVID19 spread. Be ready to accept the Mission Impossible!