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SEPTEMBER - 2019
Potential for law & order problem?
Here's a scare scenario put up by an customers. The delay in payment beyond
aggrieved entrepreneur in Peenya: The 90 days is adding to their woes. While the
unemployment that people are talking Micro, Small & Medium Enterprises
about – 3 or 4 lakh – this only accounts for Development Act stipulates that small and
big companies. Where is the data for the medium-sized enterprises (SME) should
vendors of these companies? Some be paid within 45 days, many large
vendors have 500 to 600 employees. enterprises who source components are
Should you not take note of those people? delaying up to 120 days.
If you do so, the overall figures will be
huge, but that data is not available. What is Further, the advent of GST and its complex
the guarantee then that there will be no law structure has resulted in all micro and
and order problem? This is not far-fetched small units hiring the services of chartered
but a real possibility – when you have accountants, almost 10 times more than
around eight lakh people in Peenya and earlier.
surrounding industrial areas who now Taking into account all these factors, the
don't have jobs or are going to face such an situation proves to be more grimmer since
eventuality sooner than later. Will they micro and small units in Peenya with an
take it lying down? After all, they have annual turnover of Rs 30,000 crore
families to take care of. That is another big contribute a little over 2% of Karnataka's
time worry for the industries in Peenya, gross state domestic product.
said Sri Srinivas Asranna.
According to Sri H.M. Arif, Former
It cannot be denied that the slowdown can Secretary, PIA, a majority of 10,000 micro
no longer be thought of as a standalone and small units in Peenya have seen a drop
demand-supply imbalance in the market. from 30% to 70% in their business over the
It's a downturn that is thirsting for better last six months among whom Automobile
policies for the manufacturing sector. And components and general engineering
considering that the small and medium companies are the worst affected. “We are
enterprises are among the best job already in the ICU. Since March, we have
generators in the country, this slowdown seen a drastic reduction in the orders. We
could have a major impact on social can't survive more than one quarter if
harmony.
things don't improve,” he says ruefully.
According to Sri D.T. Venkatesh, Past Green-shoots of Hope
President, PIA, more than 60 per cent of
industries here are affected by this. It has Amid all this despair, there are a few
gone on for eight continuous months now, occasional green-shoots of hope. One
and it will go on. They could all face entrepreneur who has business interests
closure. And there is no talk of a stimulus in multiple areas ranging from auto
package so far. components and machine tools to
agricultural devices and healthcare, while
Even family-run small enterprises are not admitting that the slowdown has impacted
immune. An engineering company about 20% of its revenue since some of
managed by a father-son duo, has seen its these sectors are in the doldrums, adds
business tamp down by almost 50%.
that it has managed to weather the storm
The other problems faced by small scale as of now since it has diversified its
units in Peenya are loan repayment to business.
banks and payment of wages to employees The diversification of the business was a
most of whom have been working here for reaction to the slowdown of 2008. At that
over two decades. At the same time, they point, work had come to a standstill at the
are not getting any payment from
company which was just starting. In a
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