Recession hits Punjab

Akash Bisht Ludhiana/ Mandi Gobindgarh, Hardnews

The ongoing economic crisis has started to bleed the industries in different parts of the country. This correspondent traveled extensively through two prominent industrial hubs of Punjab-Ludhiana and Mandi Gobindgarh- to probe the adverse effects of the global slow down. Back in Delhi with confirmed reports, Hardnews found that factors like recession in global markets, constant fluctuation of the rupee, high production costs, lack of skilled workforce and infrastructure are some of the chief reasons that are forcing medium and small scale industries to incur huge losses. Some are even facing closures.

Industry experts in the textile sector of Ludhiana confirm reports of mandi (slowdown) and fear that the worse is still to come. Majority of export houses in Ludhiana are working at one-third of their capacity as there are hardly any new orders and the existing ones are not being picked up by buyers abroad. "We are now totally at the mercy of buyers abroad as our consignments are not being picked up and banks abroad have refused to make the payments for the shipments," says S K Jain, Chairman, Knitwear and Apparel Exporters Organisation. The textile manufacturers catering to the domestic market complain that 2008 has been one of the worst year for the sector. "Shorter summer season in 2008 affected the t-shirt and shirt market while late winter has spelled doom for the knitwear market," S P Singh, General Secretary, Textile Professionals Association, told Hardnews.

Textile experts say that the only viable option for the manufacturers is to enter the mid-level segment and target the middle class instead of exports and high end products. Though this will harm the middle and small enterprises but manufacturers of high end products say it is ‘survival of the fittest'. Singh said more than 100 units have shut shops and some 50,000 workers have lost their jobs.

If Singh is to be believed, there are no signs of any improvement in the textile sector, second only to agriculture in employment generation in Punjab.

Similarly, the steel hub of Punjab in Mandi Gobindgarh faces dwindling steel and scrap prices. More than 100 scrap units have been shut due to the fall in the demand for steel in different sectors like automobiles and real estate among others. Many small manufacturers had to shut shop or stop production. Some owners have ventured into new enterprises like dairy products and agriculture after stopping production.

Most of these manufacturers are working way below their capacity and their production  are at an all-time low, forcing workers to head back to their homes in Bihar, UP and other parts. The traders revealed that if things don't change soon or if the government does not intervene, things will get worse.

More reports on the meltdown affecting the industries in Punjab and how it will affect the lives of poor labourers engaged in these industries will follow in coming days.