Hit by auto industry slump and drought, SMEs & their workers on the brink in Marathwada

About 70 per cent of over 5,000 small and medium-size enterprises (SMEs) , dependent on automobile sector, stand paralysed in drought-hit Marathwada.

After a severe drought last year, the region has recorded a rain deficit and the motown slump has added to the distress. Rural flocks, who had migrated to Aurangabad as contract workers, are jobless. Almost 1.87 crore people of the region are staring at another drought and economic slowdown is pushing people to the brink.

Double whammy

“Drought and slump have come together and this has had a huge impact on the region’s economy. We are facing a dual challenge. Aurangabad is an automobile hub of Marathwada. Contract workers have already lost their jobs and there are no new jobs in the market because of the slowdown,” Narayan Pawar, Vice-President of Marathwada Association of Small Scale Industries and Agriculture (MASSIA), told BusinessLine .

He added that after last year’s drought people in the region were hoping for a good rainfall. “But till date the region has not received good rains and rural population is already crowding in Aurangabad industrial areas. These migrants have no place to go with markets down in Pune and Nashik,” said Pawar.

Abhay Hanchnal, Vice-President of MASSIA, who also owns a unit in Aurangabad, said that situation is not that bad in Aurangabad as there are no lay-offs and block closures. He said that Bajaj is a major player in Aurangabad and almost all small-scale industries are dependent on the company.

Festival demand

“As of now, we are taking the situation as it comes. We hope that Diwali and Ganapati festivals boost the market and things become normal. But if the situation remains the same even after festival season then it would be a major cause of concern,” he said.

There are 1.5-2 lakh workers in SMEs centred around Aurangabad belt and their future depends on business during the festival season.

Shiv Prasad Jaju, Secretary of Chamber of Marathwada Industries and Agriculture, said that the market in the region gets fillip after monsoon, but the cycle of drought has disturbed the chain. “The industrial sector in Aurangabad belt came under pressure after Videocon pulled shutters last year. Also, no new industries are coming to the region. As a Chamber, we are trying to create an environment where small scale units get involved in exports,” Jaju said.

Majority of dams in the region still remain dry and sugar mills in the region are not in a position to start crushing due to lack of cane availability. Meanwhile, Maharashtra Chief Minister Devendra Fadnavis, who is touring the region running a pre-election campaign for the BJP, said that the government will ensure that the next generation in Marathwada will not have to suffer because of drought and distress.

COMMENT NOW