(Mint file)
(Mint file)

Companies in Bengaluru's Peenya industrial area slash jobs to cope with slowdown

  • The slowdown has hit production and led to job losses
  • From a shortage of labour, the slowdown is now pushing companies to reduce over time requirements as well as giving weekend's offs

Bengaluru: Companies operating in the Peenya Industrial Area (PIA) are witnessing a 30% dip in business due to the economic slowdown, which is likely to deal a blow to over half of the one million people employed by small and medium establishments in one of India’s largest industrial estates, according to employers and trade union organisations.

From a shortage of labour, the slowdown is now pushing companies to reduce over time requirements as well as giving weekend's offs

Prajavani, a Kannada news daily, was the first to publish the story.

“No production is taking place," said Lata Girish, director at Fortifori Plastics Pvt Ltd and past president of the Peenya Industries Association.

Describing the prevailing conditions as “pathetic", she estimates job losses to the tune of 50% since the beginning of the year in the PIA, which is spread over 40 square miles in the northern part of Bengaluru. It houses labour intensive manufacturing units including auto components, textile, machine tools, engineering and packaging solutions, among others.

From a shortage of labour, the slowdown is now pushing companies to reduce time requirement as well cut short weekend offs.

Yet to recover from demonitisation and high tax slabs under the Good and Services Tax (GST), the slowdown is pushing industries to slash jobs to contain mounting losses.

Contract labourers, the most vulnerable section, are adding to unemployment numbers in a state where agricultural activity has also been hit due to floods and droughts, affecting the rural economy that forcing more people to migrate to urban area in search of livelihood.

India’s growth has also been stunted in recent times. Unemployment is currently at a 45-year high, according to a study by the National Sample Survey Office (NSSO).

The slowdown in automobile sales and plummeting investor confidence, among other factors, have forced the government to roll back measures announced in the budget to arrest problems that threaten to send the economy into a spiral.

“There are dark days ahead and no symptoms to suggest that things will get better," M.M. Giri, president, Peenya Industries Association said. According to management representatives, they are finding it difficult to cope with the slowdown that is affecting interest payments and cash flows.

Representatives from the textile sector also stated that the sector's inability to innovate and keep up with ever-changing fashion has also resulted in losing out orders and businesses.

Several provisions in the budget had badly hit automobile sales and its supply chain, including component makers who operate out of industrial estates such as Peenya.

Data from the Periodic Labour Force Survey (PLFS) shows that unemployment in Karnataka stands at 4.8% for people above 15 years of age, lower than the national average of 6%.

Members of the industries association also met union finance minister Nirmala Sitaraman last week to voice its concerns.

But trade unions are not very hopeful.

"Capital utilisation is very low and industry houses want incentives that are unlikely to solve any problem for employees," said Meenakshi Sundaram, state general secretary for the Centre of Indian Trade Unions.

The 'desperation' to keep the job would make them more vulnerable to exploitation by employers, including low wages, unhealthy work environments, sexual harassment (more in the textile sector) and further dilution of labour rights.

According to employers and trade unions, the roll back by the government is '"too little, too late", and would take a long time to show results.

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