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| 65,000 lose jobs in 3 months across 121 firms: Govt survey | | COPING WITH THE SLOWDOWN |
| Rituparna Bhuyan / New Delhi Dec 05, 2008, 00:49 IST |
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A survey of 121 export-oriented firms by the commerce ministry has revealed widespread job losses and dip in export orders. However, at the same time, new opportunities have also emerged. But lack of access to bank credit is hampering the companies to take full advantage of it, said a senior government official.
The survey revealed that these 121 firms had shed 65,000 jobs in the three-month period ended October this year. In addition, these firms have lost export orders worth Rs 1,800 crore.
The survey was conducted in a period which saw the release of a series of economic data by the government.
“If intervention has to be done, this is the time. Or thousands of factories in the SME space will close,” the official said.
However, further details like sector-wise break up of these 121 firms and how big their operations are were not given. The government undertook this survey to get a first-hand knowledge of the extent of impact of the current global crisis on Indian exporters.
Industry lobby groups have claimed huge number of job loss. For example, textile industry claimed that more than 700,000 jobs were lost in this current fiscal and more than half a million additional jobs may be lost by March 2009.
Officials feel that liquidity crunch is one of the major factors that is having an adverse impact on the industry. “It is not that there is a liquidity shortage with the banks. The problem is that banks are not lending to exporters,” the officials said.
In fact, the ministry has found that there were cases where exporters were asked not to take additional orders by the banks.
“In one way, the global economic meltdown has become an opportunity for some exporters, as many companies abroad are shut. Hence they are getting additional orders. But banks are not keen on lending to the exporters, who need that money to produce the additional goods. While big companies are not having that much of a problem in getting loans, it is the SMEs who are facing the brunt,” said the official, who was involved in the survey.
The period between August and October 2008 was the time when the Indian economy started to feel the impact of the global economic crisis. While in August, Index of Industrial Production (IIP) expanded at the slowest pace of 1.4 per cent in 10 years, exports dipped by 12.1 per cent for the first time in about seven years.
Meanwhile, the Reserve Bank of India is likely to take a series of steps including cuts in repo and reverse repo rate on Saturday, which is likely to lead to a cut in prime lending rates (PLR) of banks. Moreover, the central bank is also taking steps to monitor credit deliver to the industry, so the healthy industrial firms are not denied credit.
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