Ambala scientific cluster in dire straits due to lockdown
Order cancellations, stuck payments worry unit owners
Industry’s demands
Collateral-free loans
Reduce power tariffs
Refund 50% electricity security
GST holiday to MSMEs for six months
Vijay C Roy
Tribune News Service
Chandigarh, May 14
Arun P Bansal (55) has been engaged in the manufacturing of scientific instruments since 1996. But, he has never faced such a grim situation. With many orders and cheques issued to him having already cancelled, he is busy calling his customers for receivables these days.
“March to May is the peak season for the scientific equipment manufacturers, as educational and research institutions place orders with us during this period. However, due to the lockdown many customers have cancelled their orders citing lack of funds. Some of our customers have given instructions to banks for stop payment of cheques already issued to us,” said Bansal, proprietor, Kshitij Innovations. He employs around 15 people in his unit which falls under micro category.
The months from March to May contribute around 25-30% of annual sales for the manufacturers.
“When I approached one of the institutions, the officer concerned said due to the lockdown, we are yet to receive fee from students and hence not in a position to buy laboratory apparatus at the moment,” said a manufacturer on the condition of anonymity.
Almost all units are passing through the same crisis. Ambala has over 5,000 micro, small and medium units which are engaged in manufacturing scientific instruments. The size of the industry is around Rs 1,800 crore. Out of this, the exports are to the tune of Rs 800 crore. The cluster exports instruments to the Gulf nations, European countries, Bangladesh, Pakistan and Sri Lanka.
The sector directly employs around 50,000 people and it is believed to be the largest in the country for manufacturing scientific instruments and laboratory apparatus. The products manufactured here are used in engineering industry and educational institutions.
The industry apprehends that many units may close down in the absence of orders and working capital.
“We don’t have deep pockets and ours is a cottage industry. We are running short of capital. My export order worth $50,000 has been cancelled. We don’t know what future holds for us,” said Cone International partner Satish Kumar Saini.
Since the industry recently shunned the century-old conventional production methods to adopt automation to remain relevant in the international market and thwart the Chinese threat, they are feeling more heat as they have taken loans for that.
According to the manufacturers, with many of the units witnessing cancellation of orders, they were unable to repay outstanding loans.
Besides other measures, the industry wants the government should ensure that the MSMEs’ dues are paid timely by government and private institutions so that they can repay their debt.
