Coronavirus impact: Confusion, despair grip MSME cluster in Okhla

Topics Coronavirus | MSME sector | MSMEs

On the deserted streets, hundreds of parked trucks and tempos are covered in dust. Photo: Dalip Kumar
“I don’t know who is better off. The labourers who fled and might not find job when they come back or me? I stayed back but I’m struggling to even buy daily groceries,” said Manoj Shukla, who works in a plastic products factory in Okhla Industrial area.

Shukla used to enjoy the bustle in the area. The crowd on the streets used to be a mix of young management graduates in their crisp white shirts sipping tea at a nearby thela and daily wager labourers like him out on a break from factories making everything from electronics to drugs.

Okhla Industrial Area is an amalgam of corporate offices on one side and the factories of micro, small and medium enterprises on the other. The din and clamour have gone. Streets are lined with trucks who have nowhere to go.

Others like Shukla live in areas surrounding the factories — Harkesh Nagar, Sanjay Colony, Sanjay Nagar, and low income housing blocks in Okhla Phase-II. All of them work in the MSME industry and they all know the sector is too small to survive the onslaught of the pandemic and the economic slowdown that will ensue.

According to the MSME Ministry’s annual report for 2018-19, New Delhi has 936,000 registered companies employing close to 2.3 million skilled and semi-skilled labourers.

“This is a situation where not much can be done. Whatever the government is doing is outstanding. But at the grass roots level, the confusion still remains. They have asked us to pay full wages. But the labourers have fled. Without them, we can’t ramp up production of hand sanitizer,” said Pradeep Multani, chairman, Multani Pharmaceuticals.

Only 25 per cent of his normal work force is present. Multani is paying their salaries and providing food. He said his units are ready to produce and dispatch hand sanitisers.

Photo: Dalip Kumar
“We are essential services and also under price control. But we are not getting more than two curfew passes. There are logistics troubles,” he said.
Multani is lucky to function at least at a bare minimum as his factory is on the larger side. The smaller ones are going under. An electric cable company in the area has flung its surplus cables onto the street due to the lack of warehousing space.

The guards and three temporary labourers at the unit stand around looking lost. “We just got some advance payment by sahib to pay for our groceries.

We don’t know if we will get the salary for the next month,” said one of the labourers.

Close to 70 per cent of the electric equipment industry is comprised of MSMEs. The industry fears many will become non-performing assets in a matter of a few months.

“On the one hand, we have no operations and no new orders or cash inflows and on the other, we have so many statutory liabilities which create cash outflows and a severe liquidity crunch,” the Indian Electricals and Electronics Manufacturing Association said in a letter to the Finance Ministry earlier this month.

The association has asked the Centre to intervene to improve working capital requirements and minimise the cash outflow.
“There should be deferment of payment of EPF, ESI and bonus for six months. GST and TDS deposits should be deferred for six months. The government should also allow an extension of the premium due dates of all insurance companies while coverage should continue,” it said in the letter.

On the deserted streets, hundreds of parked trucks and tempos are covered in dust. The drivers have vanished and so have the truck cleaners. In the lanes between factories are the tiny rented rooms where factory workers live. Social distancing is impossible. They have to crowd around a single top for water and around tiny stores for food.

A Municipal Corporation of Delhi superintendent shook his head in disbelief as he surveyed the area after a sanitisation drive. “We have been telling them every day what precautions to take but they don’t listen. We have been making announcements but very few pay heed,” he said.

For Sunny Rana, who works at a synthetic fabrics factory, the world has gone mad. His father, visiting from the village, was stuck here when the lockdown came into effect. It’s Rana, his father, wife and two children in two rooms. His children are as bewildered as their father, unable to grasp why they cannot go out to play or why all the neighbourhood children have vanished.

“I live slightly far from the factory. When my friend left for his village and I could not, I shifted to his house here which is next door to the factory. This way I can keep any eye when the factory opens or the manager comes. They gave us Rs 2,000 as advance and after that his phone is off,” he said.

(Some names have been changed to protect their privacy)

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel