Workers, small unit owners suffer equally

Unprecedented power crisis in the state has thrown the lives of workers and employees engaged in small and medium industries into turmoil. The conditions of the owners of those units are no better either. Various industry bodies claim more than 6,000 such units have already been shut down all over the state making two lakh workers unemployed. Many more are working at reduced capacities. Looking at the future uncertainties on power front industry leaders fear more difficulties may be in store. Our Correspondents have visited some of the industrial areas around Hyderabad to find out the conditions first hand�

Lalitha can't even feed her family...

"For the past two months, after I lost my job, we are living only on my husband's salary. A We have two children. After paying rent now we are left with Rs 3,500"

Aditya Parankusam Hyderabad: Power cuts are wrecking the lives of tens of thousands of workers engaged in small and medium scale industries in and around Hyderabad. According to Federation of Andhra Pradesh Chamber of Commerce and Industry (FAPCCI), crippling daily power cuts and three power holidays a week are drastically affecting production in many industries and ultimately resulting in major reductions in monthly incomes of already hard pressed workers, causing serious difficulties in their lives. "Power to industries is being supplied for 10-12 hours on non -power holiday days. Early estimates show that around 50,000 workers (contract, casual and out sourced) are affected by this. Not many companies use generators as that would increase their cost of production ", says Yousuf, city secretary of AITUC. "Rajeshwar Forging company has given 15 days leave to its workers without pay recently. Otherwise all industries in Nacharam IDA area are on 5 -day week. Workers have no job for two days every week", Ganesh of CITU told The Hans India. What could be the plight of workers in these conditions? He leaves that to one's imagination. Santosh, Lilitha, Vinoda, Veeramma, Lakshminarayana, Pasha, Dattatreya, Narasimha, Rajitha, Jamuna and Manjula are some of the male and women workers who hail from Chilkanagar, Hemanagar, Ambedkar Nagar and Mallapur in this belt of industries. They were once employed but January 31, 2013 was the dreaded day in their lives. The companies in which they were working were shut down on that fateful day. With that the lives of these people were thrown into sudden uncertainties. This is what Lalitha, a resident of Chilkanagar, who was working in Sravani Labs, has to say on this situation: "I have worked for 11 years with the company and my salary was only Rs 3,200 per month. We had no PF, no ESI, no bonus whatsoever. On 31 January some people came and sealed the office. We all were ousted. It did come as huge shock. I used to earn Rs 3,000 per month. My husband works as security guard and earns Rs 5,000. We have to pay a house rent of Rs 1,500 per month. Our total income was Rs 8,000 out of which the deduction for rent left us with Rs 6,500. Our family of four (with two children) was eking out a living on that amount. "Since past two months, after I lost my job, we are living only on my husband's salary. We have two children. After paying rent now we are left with Rs 3,500. Tell me how a family in city can live on 3,500 rupees? Prices are sky- rocketing and we can't even afford to have a proper meal. I have taken provisions from stores on loan, yet to pay for that. We are passing off days by mortgaging valuables, taking loans from loan sharks. I can't even feed our family now as before. Some days we go to our relatives to at least feed our children. Loans are accumulated up to Rs 30,000 at an interest of 2-3 % and in some cases 5%. I am really unsure for how many days I can survive", she said. The travails of Narasimha, Pasha, Santosh, Veeramma, Rajitha and Vinoda who all have lost their jobs are no different either.

Owner of a small unit killed self; news never came outA

Katragadda Prasad, founder of Sai Prasanna Packaging Industries: "I have never faced t his kind of situation in the last 10 years,"

Santosh Padala Hyderabad: Small and medium scale (SME) enterprises of the state have been experiencing untold hardships due to frequent power cuts and hiked tariff in the recent past. Owners of most of these units are on the verge of closing them as they are unable to make profits due to power crisis. "One owner of a unit in Jeedimetla IDA committed suicide 15 days back after incurring heavy losses. As he was from a privileged community of the society, his family members shied away from making it an issue ," said Sekhar Yadav, owner of Sumanth Industries. "There are hundreds of owners who cannot run their units any more. They fear that the bankers might close their units once they learn about low performance. Hence, most of the owners are pretending to be doing well", he added ruefully. Jeedimetla, one of largest industrial parks in the country, has been losing its shine after units incurring huge losses due to unavailability of basic sources and disrupted power." What was once flourishing with thousands of industries has now become a classic example of pathetic plights" , he explained. Rajeev R Kunati, after working for 20 years in the USA, shifted to India. He took over Salzgitter Hydraulics Private Limited (SHPL) located in Gandhinagar IDA by investing a whooping amount of 1.5 million dollars in 2005. Initially, he planned to make his company as one of the public listed firms. But, his company has been experiencing negative growth rate for the last 7 years owing to many problems. One of the major challenges is to get adequate and uninterrupted power supply. "I need to pay monthly Rs 6 lakhs of interest on working capital investment borrowed from a local bank. I reduced the workforce. Earlier, there were 150 workers. Now there are only 100 workers. Indirectly, around 400-500 employees have been affected with low productivity," said Rajiv. Srinivas Rao is a B Tech degree holder established Hindustan Springs in Jeedimetla IDA. He told The Hans India: "The raw material is being wasted half- processed when power is disrupted every two hours. Generally, machines take 2 hours to heat up to melt the raw metals. The electricity is cut often during the processing. As a result, I am forced to sell the half-processed raw metal as scrap." The owner of Guardian Coatings Private Limited of the IDA K Subbaiah said he had been missing both family and social life as he often had to stay in his unit. "As I have to run my unit in the odd conditions, I am unable to spend time with my children. I am not visiting my relatives' places and frequently absent myself for social functions ",he averred. Katragadda Prasad, founder of Sai Prasanna Packaging Industries located in Gandhinagar IDA, has slashed the workforce by more than 50%. Instead of 35 workers, he has been running the unit with just 15 of them. "I have never faced t his kind of situation in the last 10 years," said Prasad. M Janardhan Rao, Zonal Manager of Qutbullapur Area of Industrial Local Authorities (AILA), where over 1,200 units can be found, said the situation is horrible. "AP is one of the largest states. Availability of resources is lower than demand. Additionally, natural resources have been depleted. We cannot compare our state to Gujarat or some other state. There is no sufficient power. Hence, we cannot supply materials to meet the requirements of the units," he explained. He, however, urged the units to find alternative solutions and to adopt power management practices.

A never before situation

Since majority of those working in the MSME sector are from outside the State, most of the workers who lost their jobs have left for their home states

P Madhusudhan Reddy Hyderabad: Over two lakh workers and other employees engaged in small and medium industries have been rendered jobless across the AP due to power scarcity as of September, 2012. Some large industrial units are also on the brink of bankruptcy due to the same problem , according to Fapcci. A review meeting on MSMEs held at RBI's regional office in Hyderabad on January 8 estimated the total number of sick units in the State at 6,290 at the end of September 2012. The outstanding credit extended to them is Rs 702.96 crore. According to the review report, total exposure of public sector banks (PSBs) to the MSMEs in AP is pegged at Rs 55,757 crore. The total non-performing assets (NPAs) in this sector stand at Rs 2,462 crore. Pradeep Chandra, Principal Secretary, Industries and Commerce Department, who participated in the meeting, admitted that MSME sector was 'under stress mainly because of power shortage'. He further said that situation would further deteriorate in the next four to five months.

Since majority of those working in the MSME sector are from outside the State, most of the workers who lost their jobs have left for their home states, according to J Nageswara Rao, President, Federation of Andhra Pradesh Small Industries Association (Fapsia). He says AP has never experienced this kind of situation. Many SMEs are losing clients as they are not in a position to execute orders on time. With industries including MSMEs are supplied only 50 per cent of power, there is almost 45 per cent drop in the production. Therefore, many MSMEs are not able to pay salaries to their employees. The adverse impact of power shortage is across the sectors. But power intensive industries such as steel, cement, pharma, ferroalloys are suffering more. According to APK Reddy, President, Federation of Small and Medium Enterprises of Andhra Pradesh (FSMEA) , there are 28 industrial estates in and around Hyderabad and other 35 estates across AP. AP has seven lakh MSMEs employing 40 lakh people. The affected industries in various districts are: Hyderabad: Ferro alloys, pharma, steel, foundries, biscuit making units, plastics, industrial moulds, general engineering. Nalgonda: Rice mills, cement, clinker. Khammam, Warangal, Karimnagar, Prakasam: Granite and related industries. Ananthapur, Kurnool: Shahabad stone. Mahabubnagar: Handlooms, power looms. Chittoor: Food processing. East Godavari: Rice mills, paper recycling units. Guntur: Spinning Mills. Krishna: Automobiles, ancillary industries.

Small factories turning into godowns

P Narasinga Rao: "Most of the units are not closing only because there is no proper exit policy for MSME sector. Most of the units are linked to banks and creditors and they have to complete the orders."

T P Venu The two most dreaded words for micro, small and medium enterprise (MSME) sector are 'Restrictions and Control' of power (R&C). From 2009 till date industries functioned only for 15 days a month. M M Reddy, President, Uppal Industries Association said, "Fifty per cent of the units in Uppal are turning into godowns. The day is not far off when the estates turn into ghost towns." Going by the number of closures of units,the prophesy of Reddy could well turn out to be true. Sample this: Diagram Forgings Pvt Ltd, a company that supplied intricate automobile and engineering forged components for over three decades from Nacharam closed down six months back unable to cope with the rising power tariff and penalties. Indo Iron Foundry at Uppal closed down eight months back and Hinduja Foundries have applied to the Board for Industrial and Financial Reconstruction (BIFR) to be declared as a sick unit. The situation is similar in the estates in and around Hyderabad. The total number of units in Jeedimetla, Nacharam, Cherlapalli, Uppal and Medak are 2,905. In the case of Medak, 90 per cent of the units are dependent on BHEL for orders. At least 100 out of the 350 odd units there are on the verge of closure as they are unable to continue production due to intermittent power cuts. P Narasinga Rao, President, Medak Small Scale Entrepreneurs Association says, "Most of the units are not closing only because there is no proper exit policy for MSME sector. Most of the units are linked to banks and creditors and they have to complete the orders." With units told to use just 60 per cent of the contracted minimum demand, the units that are dependent on high tension and who need continuous power supply such as foundry, pharma and forging are the most affected. According to A P K Reddy, President, Federation of Small and Medium Enterprises of Andhra Pradesh out of the 7 lakh units in the state more than 4 lakh units are financed by banks and other financial institutions. Almost 90 per cent of the 1,200 units in Jeedimetla are functioning on wafer thin margins. R Sadasiva Reddy, President, Jeedimetla Industries Association says, "Order books are thin, margins reducing day by day and unable to pay electricity bills many units are on the verge of closure." Even though many small scale units use only 60 per cent of power, due to FSA being levied they are paying very high amounts. A P K Reddy says, "The government needs to come out with a package for the sector. Incentives should be released and 30 per cent of the generated power should be allotted for industry to save it from plunging into darkness. Affected industries in and around Hyderabad: Balanagar: Engineering, machines, chemicals Jeedimetla: Pharma and biscuit making units Patancheru: Defence equipment, ball bearing, foundries, casting, forging units, aluminum, rubber, plastic and textiles

Sampath Yadav's health is affected

All these conditions have badly impacted the earnings and lives of employees. An unskilled employee is losing, on an average, Rs 2,000-3000 per month

Santosh Padala Hyderabad: Sampath Yadav, an employees of Sumanth Industries located at Dhulapally Industrial Development Area near the city, had drawn a salary amount of Rs 13, 000 including over time (OT) for the month of January. But, next month he was shocked to learn that a sum of Rs 5,000 was reduced from his salary for February due to lower number of working days caused by power cuts. Now, Yadav's family has begun to restrict a number of household expenses in order to cope up with their new financial conditions. He has been missing both family and social life since he started working odd hours to make up for the loss of income to the extent possible. "Most importantly, I see strain on my health condition" said a displeased Yadav. The very first aim of the APIIC is to provide the units with basic amenities such as sufficient power supply at subsidised prices, transportation, land and water�to help industries as they offer employment opportunities to local residents and play a vital role in state's development. But, power supply to these units has been erratic for the last few months. In addition to scheduled cuts unofficial ones have become common. Hefty penalties are imposed by Discoms when they cross the ceiling set by the government. Additionally, like crop holiday for agricultural sector, on every Monday, the units have been observing power holiday, due to which the productivity has deteriorated by at least 40%. All these conditions have badly impacted the earnings and lives of employees. An unskilled employee is losing, on an average, Rs 2,000-3000 per month, while take home pay of semi -skilled workers has been slashed by at least 40%. Just like power cuts, their working timings are uncertain, now. They are also losing at least four working days per month due to power holidays. Sangamesh, one of the workers at Sai Prasanna Packages in Gandhinagar IDA, said, " I used to get OT earlier, but now I am working just 22 days in a month. Hence, I cannot earn the amount which I used to in the past." Hailing from Uttar Pradesh, Gitendar Pandey migrated to Hyderabad many years ago when he saw abundance of employment opportunities in the industries established with the help of liberalized policies adopted in the name of development. "I left my native place after finding the city as the most promising place to work. But the income has been insufficient for the last few months due to power crisis. In addition to that, prices of groceries and vegetable have become dearer. I used to give a few rupees to my children while leaving for work. But I am not giving single rupee now. Sometimes, I don't have money to purchase kerosene," Pandey bemoaned. In our society it is women who suffer more when their husbands lose incomes. Annamani of Maithrinagar near Suraram colony in Jeedimetla said that her husband was mostly seen in the home in the recent past. "My husband, worker at a steel company, returns after 2-3 hours of stay. He is vexed at power cuts. As transportation cost increased, it has become difficult to travel from Suraram to Jeedimetla," she said. "I don't know how to manage in the month of April, as tuition fee for two months is yet to be paid. The management of school doesn't allow my son to attend final exam this month " said Vimala of the same locality.