Even as it is getting ready to face the people with hopes of getting another mandate for five years, the Narendra Modi Government has come across a major embarrassment in the form of a report by All India Manufacturers’ Organisation (AIMO), the 76-year-old establishment founded by Bharat Ratna M Visvesvaraya .
An all India survey held by the AIMO in October 2018 has found that more than 35 lakh people working in the traders, micro, small and medium enterprises (TMSM) have lost their jobs during the last four years and six months.
“Self-employed categories such as tailors, cobblers, barbers, plumbers, masons, electricians have been eliminated during the last four and a half years,” said KE Raghunathan, president, AIMO.
Though the Modi Government came to power in May 2014 with the promise of rejuvenation and resuscitation of the TMSM segment, the backbone of Indian economy, what has happened is the opposite as many units across the length and breadth of the country downed their shutters due to a host of reasons, said Raghunathan.
“The year 2015-16 saw a growth in all areas of business due to high sentiments and expectations from the new leadership. It went down next year due to demonetisation and then again due to GST and then due to non-availability of finance and higher outstanding with Government payments and compliance matters,” said Raghunathan, an entrepreneur based in Chennai.
The AIMO survey found there has been a 43 per cent job loss in the trader’s segment over the last four years.
Traders are closing down due to stiff competition from e-commerce sales and this will also result in loss of revenue in rental income by Middle Income families, the survey pointed out.
According to Raghunathan, the survey showed that most Government schemes such as Make In India, Digital India, Skill India and Start up India have not been of much use to Traders though the Micro and Small Industries and medium scale industries were happier with Digital India Initiatives .
A counter check with Coimbatore and Tirupur Districts Micro and Cottage Entrepreneurs Association (COTMA) substantiated the findings of the AIMO. Viswanathan Sudarshan, general secretary COTMA, said the entire micro, small and cottage industrial units in the two districts are facing the worst crisis.
S Ravikumat, president, COTMA, said Goods and Services Tax (GST) remained the villain for small, micro and cottage industries. “The two districts together employed 3,50,000 workers in a regular basis. But because of the 18 per cent GST and the rigid rules, we are facing one of the worst crisis. More than 50,000 people have lost their jobs as many units downed the shutters,” said Ravikumar.
Sudarshan had something shocking to tell.
“The units manufacturing pumps and grinders the mainstay of the Coimbatore and Tirupur hub are closing down because of the issues related to GST. It is no more profitable to run industrial units,” he said. Both Sudarshan and Ravikumar said loans under the Mudra scheme eluded the units for reasons known only to the bankers.
Raghunathan said all units with a turnover of Rs two crore should be exempted from GST and all other kind of taxes in order to restore them to their health. He also said though the survey results were released on December 15, till date nobody from the Union Government has contacted the AIMO.