April 10, 2020
‘Covid-19 the last nail in the coffin, this is the gloomiest time ever, with the back dated hammer of GST and demonetization’ say MSMEs.
The outbreak of COVID-19 pandemic worldwide has created a huge gulf between life and survival of the fittest. With thousands of life at stake, businesses of the world has come to unprecedented halt. At the time of announcement of the lockdown and conditional curfew, people stormed the markets and hoarded the essential commodities creating a panic situation resulting in shortage of food and essential commodities. This commotion proved as an unforeseen advantage by some retailers black marketeering their products and demanding high prices for food items.
Shortage of food:
With lockdown in picture and facing shortage of food and money, many labours and workers were forced to leave the cities and return to their native land. Lockdown also served as a barrier for the transport business too, as 3.5 lakh trucks and lorries loaded with food items were stranded on the borders not getting permission to enter the state or cities. The blockage created shortage of fresh vegetables and fruits, biscuits and confectioneries, meat, poultry and seafood products, other basic necessities like soap, detergent and hand sanitizers and many more daily use items. Like-wise, packaging industry faced disruption in supply chain and labour shortage.
Shortage of raw materials:
The Government has allowed food processing companies and pharma companies to operate, though they in turn are dependent on their raw material and packaging material suppliers. Facing these stoppages, raw material’s mobility into the state proved difficult. The truck drivers are required to provide the credentials of the consignment receiver. Here, a letter from District Magistrate must be attached and curfew passes issued to the logistic and transport company specifically mentioning the name of the driver and helper. Passes should only be issued strictly for the limited number of drivers and accompanying person.
Today, many a companies like Nestle and Balaji Wafers are working with limited strength & capacity. However, if the labour constraints and transportation issue is taken under consideration, food industry will surely can do a much better job and hopefully things will settle and get streamlined in a few days.
Way out of the Lockdown
To ease the lockdown, Pawan Kumar Agarwal, Secretary, Govt of India, Dept of Consumer Affairs has issued Directive Order dated 4th April addressed to the Chief Secretaries of all States /UTs emphasizing a smooth operation in supply of food items for day-to-day consumption benefiting people in times of lockdown. The Department of Consumer Affairs has developed an e-pass system solution. This system enables the State govt to monitor number of passes issued by the authorized companies. These passes become handy for easy passage at the check points to deliver provisional supplies.
Central government has decided to release all GST, customs refund worth Rs. 18k crore a bid to provide benefit to around 1 lakh business entities including MSMEs as a relief to businesses hit by the Covis-19 .
The Government also said it would provide immediate relief to the business entities and individuals by releasing all the pending income-tax refunds up to Rs. 5 lakh, immediately. This would benefit around 14 lakh taxpayers.
Commerce Dept pitches for limited restarting of manufacturing
Commerce and industry minister Piyush Goyal told representatives from export promotion councils and trade bodies that his department is in dialogue with various wings of the government, including the home ministry, to allow factories to start production with safety norms, said multiple sources present in the meeting.
The commerce department as well as several other economic and food processing ministries believe that indefinitely stopping production will be detrimental to the economy, as livelihood of millions is at stake, apart from putting pressure on the financial sector and government finances.
Sources said the commerce and industry ministry has proposed that a mechanism should be put in place to ensure safety of workers through social distancing and other tools, which could see factories operate at around half the capacity.
There are suggestions that plants which have facility to house workers or where employees don’t have to travel long distances may be given priority, with the owners providing food and proper healthcare and ensuring hygiene.
It has also asked the government to ensure adequate availability of masks, testing and protective gear and facilitate seamless movement of goods and services across the country.
To help deliver necessities in virus-proof attire, BHEL is providing PPE Kits (Personal Protective Equipment). The PPE Kit can be procured @ Rs.1080/ suit with attachments. A letter to District Magistrate for assistance will prove beneficial to all the food industry players to restart their production which has already suffered a setback.
Mithai and Namkeen industry too has faced a total closure throwing the industry in doldrums. Federation of Sweets and Namkeen (FSNM) is trying to bring the state of stability in the industry by encouraging the big and small players to start production but first observing the total safety and sanitation measures for its workers and manufacturing premises.