Government help must to alleviate business blues: Kochhar

Industry & lockdown

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The industry — both organised and unorganised sector — has been hit hard due to the Covid-19 outbreak, as residents have been forced to stay indoors till May 3. In an interaction with GS Paul, ASSOCHAM (Punjab) chairperson and director of one of Asia’s leading producers of paper Suneet Kochhar spells out the adverse impact of Covid-19 on the paper industry and plans to refurbish it in the near future. Here are the excerpts:

How has Covid-19 hit the Indian paper industry?

A loss of approximately Rs10,000 crore has been estimated during the Covid-19 pandemic-driven lockdown for the Indian paper industry that accounts for 4-5 per cent of the global paper production. The ongoing crisis will see the sale of paper plunging as demand from the packaging, education, corporate and print media sectors has come to a naught. Not only with the paper industry, it will be the same story with every industrial unit. At present, 80 per cent of the economy has come to a standstill.

How do you cope with the prevailing situation?

We have shut down our operations temporarily as far as newsprint is concerned. With a dip in circulation, many editions have seen a digital push and there is negligible demand for newsprint. We can only carry on with our cardboard unit, used for packaging. It is also not viable as transport freight, too, has escalated manifold.

What are the hiccups in operating the units?

We were told to ensure payment of wages to workers, irrespective of the fact that their services were being utilised or not. On the other hand, no thought was given to the fact that there is no income due to lack of demand and production. There is no relaxation in taxes. Rather delay for a small period is the only solace for industrialists.

How about arranging labour and wages?

My biggest worry is how will we arrange the April salary that amounts to several crores. The UK, Germany and the US governments have announced to shoulder the burden of workers’ salaries up to 70 per cent to give a relief to the industry. There is no such policy here. I have never seen such a crisis in my life and nobody would have anticipated this situation. It was cumbersome to arrange workers’ transportation keeping in view the social distancing norm. Generally, factories across the country were never designed to house workers on the premises.

How do you see the situation post Covid-19?

It is time to reset the business model as the manufacturing sector can face severe workforce crunch. In our unit, over 30 per cent of the skilled labour, that we had outsourced and engaged in technical duties such as wielding, operating boilers and machines, has left for their native places in UP and Bihar. I will hesitate to engage local operators.

What, according to you, should be the governments’ role?

The Centre and the state government ought to formulate a liberal policy like a one-time, one-month refund of GST to all units in April. This step will at least restore their work. Till the situation returns to normal, banks and public sector financial institutions can extend interest-free loans. Many industries in the state availed of medium-term loans. Their instalments can be deferred without penal interest. The burden of workers’ wages can be reduced by utilising the Employees’ Provident Fund (EPF) dues already in the governments’coffer.

When do you expect it to get back on track?

There is no possibility of recovery in this fiscal. We presume that it will only get back when a vaccine is developed. Otherwise, the Covid threat will force governments to extend the lockdown repeatedly.