20 May 2022
Power outage: Jalandhar MSMEs' new struggle
Highlights
With the Covid-19 pandemic showing signs of ebbing and economic activity picking up, factory owners in Jalandhar had hoped that the worst was over
However, the heat wave in April and extensive power cuts that came with it, have crushed their hopes.
The city’s large number of micro, medium and small enterprises (MSMEs) are now gearing up for yet another struggle, this time to survive with the shortage of power that is severely impacting their operations.
Jalandhar is an exporters' hub, which produces a range of goods such as leather products, sport equipment, hand tools, and so on.
At Focal Point, the city’s only industrial zone, the power crisis is being felt on multiple fronts.
Many manufacturing units have suffered a decline in production owing to unscheduled power cuts, while others have been forced to change their production plans on account of the government sending sudden notices of power outage.
The owners of these units say that they are paying their workers despite sub-optimal or zero production on certain days.
Add to this, the cost of changing production plans, and having to use diesel generators as power backup.
“We have somehow managed to keep our manufacturing steady despite the uncertainty.
"Recently, the government told us not to operate our factories on Saturday, and then they backtracked.
"But by then, we had already relieved our labour for the next day. So had to bring them back, and operate the factory at 75 per cent capacity,” says Ashwani Kumar, the northern region chairman of the Federation of Indian Export Organisations.
Kumar, who owns Victor Tools, a leading manufacturer and exporter of hand tools, says that the heavy machinery at his units cannot be operated on diesel generators.
He also points out that factory owners like him are having to pay the daily wagers even on non-production days and call them on unscheduled days to make up for the production loss.
Some factory owners, however, say that they face the same power crisis every summer and the situation over the past weeks has not affected production significantly.
However, most workers and locals in the area have a different story to tell.
Daily wagers who operate heavy machinery in the sweltering heat have been struggling with loss of wages since the power cuts began in April.
“I make Rs 400 a day. On certain days last month, we were told that we would not be required to come.
“Power cuts at home is also a big problem, but what we cannot deal with is the loss of daily wages,” says Sunil Kumar Yadav, a worker from Bihar.
A tea vendor in the area, whose stall is usually crowded with workers, says that business has been slow since last month as there were fewer workers around.
A local food vendor agrees, saying that he hasn’t seen many of his regular customers because the working days at the nearby factories kept changing.
According to factory owners, though they have dealt with power crises in the past, it has come at a particularly bad time this year.
The paddy sowing season is upon them when most of the power supply is diverted to the agricultural sector.
This, many fear, will further impact industrial and domestic consumers.
"During paddy sowing, when agricultural pumps need a lot of power, there is going to be an even greater shortage of electricity if it is not well managed,” says Tushar Jain, convenor of the panel on agricultural machinery at the Engineering Exports Promotion Council (EEPC).
Some industry stakeholders are hoping that the Punjab government’s decision to introduce a minimum support price (MSP) for moong dal (lentil) will encourage farmers to delay paddy sowing for some time.
By then the shortage of coal may no longer be such a serious issue and the monsoons would reduce the heavy power demand from agricultural pumps.
Narinder Sagoo, president of the Focal Point Extension Association, has been part of the deliberations with the state government in this regard.
“I had a meeting with government representatives and they have assured us that the power situation will be stable,” he says.
But the government probably has eyes only on the Focal Point industrial area, and hence improving the power situation there would not benefit the units that are outside the industrial belt.
Rural residents and MSMEs faced power cuts of eight to nine hours on a number of days last month.
Suresh Rudra, a small leather goods retailer outside the Focal Point industrial belt, says that the cash-strapped electricity department of the state is resorting to desperate methods now.
“Every day, more than 50 connections are being cut off because of delays in the payment of dues,” he says.
“How will we survive? First, they don’t give us regular power supply, and we suffer losses on operations and labour costs, and then they abruptly cut off our electricity, causing us even more losses.”
He adds that smaller units can’t afford diesel generators because it would raise their production cost by four times.
The current crisis has also highlighted the legacy issues faced by the industries in Jalandhar.
“There has been no new industrial Focal Point in Jalandhar for the last 30-35 years.
"The land prices here are also too high, so small industries have moved past these old zones which continue to face the same old infrastructure niggles.
"Giving power in this industrial cluster doesn’t help small businesses,” said an auto parts manufacturer based in Focal Point.
The Aam Aadmi Party swept to power in Punjab recently with promises of 'free power' to domestic consumers.
For industries, its promises haven’t been as lofty.
For now, along with the farmers, manufacturers are also looking at the sky and praying to the rain gods for timely monsoons.
Source: https://www.rediff.com/business/report/power-outage-jalandhar-msmes-new-struggle/20220520.htm