Job losses in Pune’s MSME sector

12/3/2018

PUNE: The latest Maharashtra economic survey report has revealed job losses in micro, small and medium enterprises (MSMEs) in the Pune region during the 2016-17 period, as compared to 2014-15.

The economic survey for 2017-18 shows employment in MSMEs in Pune region was at 7.23 lakh last year, as compared to 10.05 lakh in 2014-15. During the same period, the number of MSMEs operating in the region came down to 69,704 from 92,233 in 2014-15.

While Pune continues to be the growth engine of the state with the largest number of industries, the picture is positive for Nagpur, the region represented by chief minister Devendra Fadnavis and Union minister Nitin Gadkari.

From 26,714 MSME units involved in manufacturing and services, employing 2.55 lakh people in 2014, the situation in Nagpur improved to 1.4 lakh MSME units generating employment for 2.93 lakh people, according to the ESR released by state finance minister Sudhir Mungantiwar in Mumbai.

Deepak Karandikar, vice-president, Mahratta chamber of commerce, industries & agriculture (MCCIA) and former chairman of MCCAI’s sub-committee on MSMEs, attributed the reduction in employment to a slowdown in the industry.

 “Given the overall slowdown in the industry, the MSMEs which depend on the expansion of bigger industries have been impacted badly. Also, technological developments which bigger companies adjust to quickly, small companies face many difficulties in adapting to,” said Karandikar.

CV Chitale, chartered accountant, said, “Along with demonetisation and GST, the increased cost of labour and infrastructure have adversely affected all MSMEs. Also, the strategies of big companies have affected them. Nowadays big companies prefer one big vendor over 10 small vendors, because of this, nine out of 10 vendors have become unemployed. Small industries who strive on such business proposals face many difficulties.”

Demonetisation, according to experts, has been a major negative factor for MSMEs and industry experts hoped that fresh sops offered by the centre will benefit MSMEs in the near future.

During presentation of the Union budget, finance minister Arun Jaitley offered many sops to MSMEs which included bringing down the corporate tax rate to 25 per cent for companies with an annual revenue of up to Rs 250 crore. The budget earmarked Rs 3 trillion for 2018-19 under the Pradhan Mantri Mudra Yojana or Mudra scheme. In addition, Jaitley allocated Rs 3,794 crore for credit support, capital and interest subsidies to MSMEs.