‘Govt should reduce GST rates for short period’

Industry and Lockdown

N aavniit Miterr, managing director, Emdet Engineers Private Limited, talks about the impact of the Covid-19 lockdown on their units. His father Dev Mitter started Emdet Engineers Private Limited in 1960 on the Amritsar-Fatehgarh Churian bypass. His grandfather Dr Tulsi Das was an eminent doctor who was founder director of the PGI, Chandigarh, and Rohtak Medical College. His father had entered the steering wheel business after finishing his automobile engineering from Loughborough in the UK. In 1959, he had initially started Eastern Motor Garage on the Court road from the Rs10,000 insurance amount of his mother and later, he established a bigger unit on the Fatehgarh-Churian bypass. In an interview with Neeraj Bagga, Miterr throws light on business strategy post Covid-19. Excerpts…

How has the lockdown impacted your business?

All our original equipment manufacturers such as Tata, Mahindra, Sonalika, Tafe and John Deere are closed. Once they open, only then manufacturing will start. Production was to be brought down as the number of orders came down. Labourers left for their native places. All units had to incur losses as they had to pay wages to labourers despite the fact there was no work. For some time, even minimum electric charges had to be paid. It is almost a loss which the MSMEs will not manage to bear. The government offered loans to MSMEs, but did not bother to reduce the rate of interest or even waive interest on loans to industrial units during the lockdown period. There is no reduction in the GST rate, which would have boosted the economy substantially.

Do you expect resumption of your business in near future?

The units at Rudrapur and Pune have started production with their 20 per cent capacity after the demand was generated in the tractor industry. Expectations are that LED bulbs will be in great demand. Earlier, Syska used to import these bulbs from China. Now, this will be substituted by home production at its unit in the NCR from August. If the monsoon goes good, the industry will revive early.

How are you dealing with the issue of paying salaries to workers?

There are 400 employees in all three units. We supported them in March and April. We are looking towards measures to pay them for May. Employees are quite receptive if we assure and ensure them. So, those who were not covered under the ESI, we insured them to ensure quality health treatment.

What lessons have you learnt from the lockdown as a businessman?

One should have a backup for an unprecedented calamity. For instance, sound funds are required to run the business and should not depend upon loans.

Do you consider the current crisis as a challenge or an opportunity?

It is a challenge to survive and remain in the business. It will be an opportunity if somebody thinks to change the line. One has to think out of the box.

What are your expectations from the government?

The government should make some reductions in the GST rate, though for a short period of time, to push up the economy. To fight the recession in 2008-2009, the government had brought down the VAT from 16 per cent to eight per cent. Then, the government gradually increased it to 12 per cent in a span of 12 to 18 months. Consequently, India was one of the first countries to revive its economy because of high domestic consumption. Earning of the GST is negligible at this point of time, but with a lower rate, the economy will move faster and in a year or two, it will revive.

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