Nashik Industrial Zone: Manufacturers Lose Hope with Job Cuts and No Work

[This is the first part of a series by NewsClick on multiple issues across the state in the run-up to the state Assembly elections.]

“I am not being able to think about anything right now. I don't see a future. There is no hope. I can see only darkness,” says Rajendra Jadhav, as he talks about the prospects for his business. Jadhav's Sansun Industry Private Limited is India's largest manufacturer of gym equipment. His overall turnover runs into Rs 80 crore. But as many industries continue to deal with a slowdown, Sansun is no exception to it.

Rajendra Jadhav

Since 1990, Jadhav is in the business of metal fabrication. Now, he owns two firms, Ganesh Fabrications and Sansun, both of which deal with the metal industry only. "As we are the biggest manufacturer of gym equipment, our principal customer is the government. Municipalities all over the country, sports departments, etc. But that has become a problem for us. Our bills have been pending for eight to 12 months. Government doesn't have money. So, we are facing a liquidity problem," he says.

This is a sign of a recession. As tax collection has received a big blow in the last two financial years, it is now reflected in the government spending. Be it curtailment of funds for highway authorities or for gym equipment, government is struggling, and it is affecting many like Jadhav all over the country.

NewsClick met with former president of Nasik Industrial and Manufacturers’ Association (NIMA) Mangesh Patankar. He described the current recession as the “worst ever phase in the history of NIMA where an entire industrial area is looking dim”.

Mangesh Patankar, former president, Nasik Industrial and Manufacturers’ Association

"I make electroplates. In our two companies, we had total 70 employees, which has now been reduced to 34. A year ago, we used to make 50,000 components regularly, which has come down to almost zero now. Our employees are asking for five-day weeks now, as there is no work left. Nobody could have imagined that this is how bad it can get,” he said.

According to Patankar, the biggest cause for concern for the small-scale manufacturers right now is the Goods and Services Tax (GST), which, he feels, has a very confusing and complicated structure. "No industry leader is against GST. Rather, the idea of a single-slab GST is very suitable for us. We are also not against facing some initial hurdles in the implementation. We would call it a ‘teething problem’ and every industry leader who is not averse to taking risks is ready to face it. But here, we have a completely different problem. Under the name of GST, we have got the most confusing tax structure," he said.

Patankar holds demonetisation and GST responsible for the current crisis in the market. "We had one member in NIMA who was working with bangles. It was completely an informal setup. All his raw material came from scrap. He used to send that scrap to Uttar Pradesh and Madhya Pradesh where women had traditional moulds at home and made bangles for generations. Demonetisation broke this entire informal industry. The setup is shut down completely. So, who faced problems? Those who dealt with scrap and those poor women," he said.

Patankar put the onus on the government’s handling of the situation. "The government is not anti-business. But they form a committee of 10 people; three are IITians, three from their ideological brotherhood and three-four government officers. These people take decisions without even consulting with the stakeholders. Even if they discuss, they don’t consider our suggestions in their final decision. Now, tell me how the government will be able to see what it wants to see?"

Nasik is India's one of the biggest hubs of ancillary set ups for automobile industry. One can find vendors from Tier 1 to Tier 4 level here. Dinesh Kohok is in consulting business for the automobile sector for over 40 years. While speaking to NewsClick, he said that he has never ever seen such anxiety amongst the businessmen in all these years. "Almost everyone is looking for diversification of their businesses. Because they are not getting what they are supposed to be getting from their core businesses. This diversification takes time. But the issue is that nobody knows whether there is light or not after this tunnel. This period of uncertainty is stretching far and that's the biggest problem ahead of the industry."

According to Patankar, NIMA has seen almost 20,000 job cuts in the past four months. "This number can be bigger, but is definitely not smaller. If there is no work, how can we pay the labourers? It is inevitable," he said. "Government should give assurance to industrialists by making clear policies. Mere promises don't work on the ground," he added.

On the other hand, Jadhav has sealed a deal with one of the biggest gym equipment manufacturers in the world – TGO (The Great Outdoor Gym). The company is expected to start manufacturing its products in Samsun’s Nashik unit. "Isn't it FDI? Aren't we helping the country to grow? If you want to achieve your $ 5 trillion economy goal, you need to present a roadmap for that. Have you seen any such proper plan for it? I don't have come across till any now. We create wealth. If we ourselves are unaware about the plan to grow, what’s the point?" he said. Unfortunately, in many industrial zones in and around the country, this sentiment prevails.