The COVID-19 pandemic has hit the world in an unprecedented way. It has brought a sudden halt in our lives, like someone has hit a pause button and we are not sure when our lives will be resumed again. Due to the ongoing lockdowns, many industries across the world have also been affected in a very unexpected ways and India is no exception to it. Indian economy has also received a blow during this pandemic. The manufacturing industry which contributes to around 20% of the GDP has been primarily affected. Let us see how.
Reduced Demands: Many businesses are witnessing reduction in demand since the lockdowns started, for example the Automobile Industry which is actually the largest contributor to the manufacturing sector in India. But since lockdowns started, demand of automobiles has been reduced drastically. Same is the case with textile and cosmetics industries. Due to the closure of malls and restaurants, the textile and cosmetics industries are also witnessing a generic low demand.
Labour Issues: Due to the initial lockdowns, the industries were completely shut for a period of 40-50 days. Now, with partial lockdowns, they are allowed to operate with 30% to 50% worker strength only which directly hampers the productivity. Moreover, workers are not willing to come to work because they are concerned about their safety. Apart from this, we also saw a large number of migrant workers move back to their native villages. This has created a deficit of labour. Some manufacturing industries require particularly skilled work force and to find and train workers on such short notice is again tough.
Disruption in Supply Chain: In general, Indian industries are known to have longer supply chain networks. But because of the restrictions on inter-district and inter-state transport, these supply chains are disrupted. Some industries are facing issues in continuous supply of raw material whereas for some others, transport of end product has become difficult. Uninterrupted availability of resources is a far-fetched reality in these trying times.
Safety Concerns: Although companies have started to operate, there is always a risk of spread of coronavirus and hence they have to be very cautious. The safety practices to be followed have been increased manifold and so has the time and money to be invested in them. Maintaining overall sanitation of the plant, personal hygiene of the workers, periodically disinfecting the shop-floor while following social distancing is no doubt a tedious task. Companies in the MIDC also have to provide for safe transport to their employees since public transport has been interrupted. This takes up considerable time and resources.
Lack of Infrastructure: Small industries account for a big chunk in the manufacturing sector in India. They contribute to around 40% of the gross industrial value in Indian economy. These small industries have a very limited access to modernisation and rely on manual labour and age-old techniques. Even though they have more demand for their products, for example food industry, they are unable to fulfil l it because of lack of proper infrastructure. For that matter, many Indian companies lack modern technology and infrastructure needed to manage the work remotely or with fewer employees.
Many companies, big and small, have started taking steps in the direction of automation and digitization to cope up with this crisis. Can this pandemic be a blessing in disguise for Indian manufacturing industry? Can it actually pave the way to a more modern and better approach towards work? Will the need to survive in the pandemic completely transform the infrastructure of our manufacturing industry for its betterment? Find out in our next blog.