Unlike the big ones, micro units — which make up more than 40 per cent of the industrial landscape in Pune — have failed to see any significant recovery so far due to lack of ready credit and trained manpower.
Several industry surveys might have reported that more than 50 per cent of Pune’s industrial units have returned to pre-Covid levels of production, but there is a darker side to it which is often missed.
Unlike the big ones, micro units — which make up more than 40 per cent of the industrial landscape in Pune — have failed to see any significant recovery so far due to lack of ready credit and trained manpower. Industrial units with investments up to Rs 1 crore and an annual turnover of not more than Rs 5 crore are classified as micro units. These generally employ not more than five people and often take up jobs as a third or fourth vendor of the bigger units.
According to Sandeep Belsare, President of Pimpri Chinchwad Small and Medium Scale Industries Association, of the 11,500 small and medium-sized enterprises (SME) in the industrial township of Pimpri Chinchwad, around 7,000 units qualify as microunits.
Last week, the Mahratta Chamber of Commerce Industries and Agriculture (MCCIA) had, in a survey, indicated the worrisome state of affairs of these micro units. 9 per cent of the 100organizations surveyed had indicated that they would require a longer time to get back to their pre-Covid levels of production. The survey also revealed that bigger units have reported better recovery than the medium, small and microunits.
Citing the reasons for the slow recovery of the units which form the backbone of Pune’s industrial landscape, Belsare said, “The labour which used to work in these units still haven’t returned since they left owing coronavirus-induced lockdowns last year. Ideally, these units require trained staff and thus, in absence of them, they are unable to get back to their ideal production levels.”
What is acting as major hurdle for the units is also the lack of capital or institutional credit to crank-up their operations, he said.
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“Majority of these units are affiliated to cooperative banks. As such, the credit line extended by the public sector and private banks has not been of any use to them,” Belsare added.
A vast majority of these micro units, Prashant Girbane, Director-General of the MCCIA, said, have fundamental issues in getting formal credit. Of the 6.3 crore MSMEs which were identified in the 2015-16 survey, around 5 crore classify, as what Girbane called, as informal or unrecognized units.
“These units majorly raise credit from informal sources, like friends, family or, in extreme cases, moneylenders. When finance minister Nirmala Sitharaman had announced an increased credit line to the sector, a vast majority of them were not able to benefit from it,” Girbane added.
Another cause for these micro units to lag is the delay associated with the credit-line extension policy. “Such policy normally benefits the bigger and more organized players first and then trickles down to the smaller units. What we need is a dual effort — a special policy aimed at the informal or unorganized sector and a top-down policy for the bigger players,” he said.
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