'Labour is scarce, automation costly'

It’s a catch-22 situation for Saurashtra-based small and medium enterprises (SMEs). Not only is there a manpower shortage, but SMEs are now also finding automation too costly as an alternative.

For the past couple of years, the engineering industry in Rajkot and other parts of Saurashtra region have been reeling under manpower scarcity. Most of the industry’s work force is believed to have moved to more remunerative sectors like construction and agriculture. Moreover, workers coming from other states have also returned to their home towns, as employment prospects have improved there.

“Automation has become imminent for SMEs due to the shortage of manpower, but it is also a fact that not everyone will be able to afford automation, as it is too costly for them. But there is no other way out from this situation,” said Dhansukh Vora, president of the Greater Rajkot Chamber of Commerce and Industries (GRCCI).

“SMEs have to change otherwise it will create more trouble in the coming days. Either they will have to turn to technology upgradation or leave their current operations and change their area of operation,” he added.

Vora continued, “Financial assistance is available through various schemes but lack of transparency in government agencies which implement the schemes is a problem.”

“Manpower shortage is hurting the growth of the engineering sector across Saurashtra. Conditions are bad and will get worse if the manpower problem is not resolved. For that we will have to turn to automation, but it is not possible for everyone,” said Bhavesh Patel, president of the Rajkot Engineering Association.

“Government could not do anything so far and will not do anything,” Patel added.

Bhavnagar District Chamber of Industries President Bipin Siddhpura said, “Automation is not possible for every SME. It is not just the issue of affordability. It also creates other problems for them.” Automation, he said, would increase the cost of production for small units, who lack scale.

“If a small unit adopts advanced technology, it would increase the production by four to five times, but a small unit doesn’t have that much capacity to build inventory. Ultimately, production cost will increase,” he added.

Bhavnagar has more than 600 small units spread across the machine tools, rolling mills, plastics and oxygen plants, besides other industry. The annual turnover of Bhavnagar’s various industries is about Rs 5,000 crore. Around 15,000 are employed by SMEs in Bhavnagar, but industries require more than that.

Meanwhile, Rajkot — another engineering tools hub — is known for its diesel engine, auto parts and machine tools industries. More than 4,000 SMEs in the engineering sector employ around 125,000 people — a number that has declined considerably over the past couple of years, causing a shortage of labour.