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Slowdown may render 30 lakh MSME workers jobless: KASSIA

-The Hindu

Karnataka has over 6,00,000 small industries that employ over 70 lakh people

Bengaluru:
If the Union government fails to come up with precautionary measures to minimise the impact of the economic slowdown on the MSME (Micro Small & Medium Enterprises) sector, at least 30 lakh people will go jobless in Karnataka, cautions industry apex body, KASSIA (Karnataka Small Scale Industries Association). “The recession is no more a fear, but a reality and the heat is already felt on the MSME sector in general and auto ancillary units in particular,” said KASSIA president R. Raju.

Karnataka has over 6,00,000 MSMEs that currently employ over 70 lakh people. More than half of these MSMEs are auto ancillary units, that manufacture various engineering and fabrication components for commercial vehicles, passenger cars and two wheelers.

“These auto ancillary units have drastically scaled down their operations thanks to recession in the automotive sector. As a result, lakhs of temporary workers have already lost their jobs and another 25 to 30 lakh people are likely to go jobless sometime soon,” Mr. Raju said while addressing a media conference here on Tuesday.

It was worrisome that the MSME sector has been facing severe headwinds both on the global and domestic fronts. It has been under severe strain, with loss of production and loss of employment in many sectors. The slowdown across automobile industry, auto parts and ancillary segment and also in textile and garments have undoubtedly added more woes to small and medium industries, said Kassia.

Mr. Raju said, “A series of new changes such as demonetisation, Goods & Services Tax and fresh norms for green commuting, etc., have been taken up almost back to back. Untimely implementation of government schemes/policies and an undue rush towards green initiatives have adversely impacted the lives of small entrepreneurs in general and auto sector in particular.”

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