Need for the revival of industrial sector
By: Alee khan
Last year, due to covid-19, the country’s economy collapsed and the industry was derailed. The country faced a strict lockdown for prevention and breaking the chain of covid-19 infection- complete lockdown was implemented across the country, which was relaxed in a phased manner and the industrial sector was limping back on track. But before any momentum could have been gained, the second wave of the deadly virus appeared and infected more people causing many more deaths and a lot more economic downfall.
As the country was ramping up its efforts to deal with the economic challenges, the second wave of covid-19 once again turned everything upside down and left negative impact on the economic sector besides other sectors that were equally hit. Where, today there is an environment of volatility in the market due to Corona epidemic, a sharp increase in unemployment has been registered side by side besides impacting supply chains, declining government income, the collapse of the tourism industry, a sharp reduction in consumer activity and a drop in fuel consumption. As a result of this, the industry was again hit, especially small industries which are literary on the verge of collapse.
According to an estimate, during the Corona period, about 10 percent of the industries of the Micro, Small and Medium (SMSE) sector were closed last year and more than 30 percent were on the verge of closure. This time again the pandemic has caused a big blow to the micro, small and medium industries. Obviously, it will take many years for the industry to recover from this blow when it has suffered massive losses again.
Today, the micro, small and medium scale industry has been hit hard and according to TIE Delhi-NCR and other reports, the startup ecosystem in India was particularly affected. Furthermore, CARE Rating Agency in a survey found that amidst business uncertainty due to the second wave of Covid-19, most of micro, small and medium industries cannot expect any improvement in their business activities for the
Last year, the central government had made a provision of 20 thousand crore rupees for the troubled micro, small and medium scale industries and under this around 2 lakh SMSEs were claimed having been provided with help. Approval was given to infuse capital of Rs. 50 thousand crore for SMSE through Funds. Emergency working capital facility of Rs 3 lakh crore was also provided for SMSE sector and it was quite a relief for the industry.
However, the second wave of covid-19 has completely broken the back of the industry. There is a need to bring the derailed industry back on track and government must make great efforts for this and assist the entire industry in gaining the momentum. The time has come to accelerate the disinvestment of public companies and emphasize measures to boost the manufacturing sector. To ensure the availability of raw materials, reduce customs duty so that the price of raw materials will come down.
It is also very important to have industry as the main priority at this time and the government should make the industry stand on its feet by making provisions that are friendly and take into account all the hardships and hurdles faced by the industry. The government needs to focus more on the development and convenience of credit facilities and ask banks to provide loans at affordable rates as well as the GST rates need to be reduced. The rate of interest on loans from banks should be reduced and the government should spend more on infrastructure related projects and give more emphasis on agriculture sector so. Apart from this, banking license should be given to corporate, minimum alternate tax should be abolished and skill development should be promoted, which will bring huge relief to the industry.
(Freelance writer and columnist)