Only 13% of industrial units resume ops after Odisha eases lockdown

The easing of curbs on industries has not translated into a swift revival of their operations in Odisha. After the lifting of lockdown 2.0 and the consequent relaxation in norms, only 13.29 per cent of the 47,515 registered industrial units have resumed operations.

Only the large industries and SMEs (Small & Medium Enterprises), barring food processing plants, have restarted operations.

Within the large industries, process plants such as blast furnaces, operated by steel makers and aluminium smelters, have already been running continuously after being allowed to function by the local administration.

Among the brick kilns, 32.08 per cent have reopened in rural areas.

The state government had received 1308 applications (as on May 6) for restarting industrial units. Approvals have been granted to 1234 of them.

However, micro units in the state have not been able to resume operations to catch up with their larger peers.

“Most of the micro enterprises in the state run with a pool of 8-10 employees. Post Covid-19 pandemic, the promoters of such units have found it immensely difficult to maintain operating expenses and pay salaries to the workers. Cash flow has dried up.

Unless the government announces a package, most of the units would be forced to down their shutters”, said the owner of a micro unit.
 

As a fall-out of the nationwide lockdown, the small and micro scale industries in the state are facing hardship. In the absence of manufacturing activity, there is no cash flow, while the credit cycle has been badly affected.

Previously, Odisha Small Scale Industries Association (OSSIA) had appealed to the prime minister to declare packages in banking and finance. The body suggested that the moratorium announced by the Reserve Bank of India (RBI) on EMI (equated monthly instalments) repayments be made applicable for six months from the month when the lockdown was declared. 

Besides, MSMEs should be given the leeway to make these pending payments in 24 instalments without interest or penalties.

“We appeal to amend IRAC (Income Recognition & Asset Classification) norms for declaring NPAs from 90 to 270 days as recovery of payments from debtors is totally in a mess in the present situation and is likely to continue to be irregular for sometime even after the lockdown is lifted. We also demand a complete waiver of all bank charges, fees and interest on all types of loans and advances availed by the MSMEs with effect from March 1, 2020 till the resumption of normal production.

Both public sector and private sector banks should unconditionally enhance the cash credit and working capital limits of all MSMEs by 25 per cent of present facilities availed by them for a period of two years with low rate of interest”, Smarajit Mohanty, president of OSSIA, wrote to the prime minister.