Many industrialists said that they had never seen in their lives the kind of slowdown, which they witnessed in the last 6-8 months. Some are hopeful of a recovery, but others think that things could get worse from here. Bankers are unwilling to give loans even to genuine borrowers. And the fact that Goa’s two main industries – mining and tourism – are battling with severe challenges has made situation only worse.
By now, it’s a foregone conclusion that Indian economy is going through its worst phase in close to two decades. There is no way that the industrialists in Goa can escape what is happening in national economy.
Of what is made in Goa, very little is consumed here. Most products/services are exported to other states of India, and if they are facing the heat of slowdown, there is no way that Goan industrialists can escape it.
Even within Goa, demand has slumped as people are not buying because they are apprehensive if they will have regular income in future or not. Most industrialists are facing the worst slowdown they have seen in their entire lives.
Parag Joshi, managing partner, Jutex & Laminex, said, “I’m into packaging, which is a must for everyone, but even then the demand dropped. The slowdown that I witnessed between June to September, I have never seen something like that in my life.”
He continued, “Our business had declined by 40% in June-July last year. Our viability went haywire. We were forced to cut our shifts. Some people, who we used to employ on contract, had to go. However, I’ve seen some improvement in my business starting from November.”
Having seen the worst in the previous year, Joshi is still hopeful of recovery, but others are not equally optimistic. In some cases, the industries have not fared too badly, but their vendors are facing such a slowdown that it threatens everyone in the value chain.
N. Sriram, founder director, Molbio Diagnostics, said, “We make medical devices and we are not so affected by the slowdown so far. But, we are having difficulties with our vendors, in terms of advance payments and etc. This is disrupting our costing as well. Right now, things are manageable, but they can get worse as well.” Even in a bad economy, people suffer from ailments and therefore the demand for medical equipments shouldn’t decline as severely as other products. But, Sriram had a different take on it.
Lack of industrial land
He said, “In the times of slowdown, people are avoiding going for medical check-up, unless it is absolutely necessary. Moreover, small businesses are not able to get working capital funding from the banks.”
In other words, there is no industry, which is able to escape the slowdown. Even if someone is in medical instrument business, his customer can always go for an inferior brand of the same product compelled by the slowdown.
The Union Finance Minister, Nirmala Sitharaman, had reduced the corporate tax rate from 35% to 25% in September last year. Months after the cut, no revival has happened and corporates are still averse to investment.
Sandip Bhandare, a chartered accountant from Panaji, said, “Even for genuine cases, banks are not willing to lend money. The other thing is we have not had new industries in Goa for a long time now. That could also be because we lack industrial land.”
So far, Goa Industrial Development Corporation (GIDC) has not allotted plots to industries from the land it got back from the special economic zone (SEZ) case. In the absence of which, there are no large parcels of industrial land left in the state.
But, it is still a telling fact that Goa has not attracted large industries for a long time now. Hardly any major Indian or international manufacturer have set base in the State in the recent times. The existing businesses are struggling, while the new industries are not coming here.
Bhandare added, “Unfortunately last year, even the monsoons were much heavier. As a result, fishermen couldn’t go into the sea for catching fish. Every sector is affected one way or the other.”
Industrialists are surprised that the State government has not given new direction to the industries, especially when mining and tourism are facing challenges. At such a time, it would be really good if the government makes some policies to help industries apart from mining and tourism.
Damodar Kochkar, managing director, Ultratech Automotive, said, “I get large chunk of my business from Kadamba Transport Corporation Ltd (KTCL). The KTCL floated a tender in June last year, but in December they decided that the government did not have sufficient funds and they didn’t place the order.”
Even government organisations are cutting expenditure because they don’t have funds. Whether your client is a government entity, a private company or an individual, all are facing headwinds of slowdown and everyone has curtailed consumption.
The industrialists agree that they are very much in the midst of a massive slowdown. However, they don’t agree whether a recovery is in sight. Some think the worst is over, but others are not so optimistic. Even then, the fact remains that these are some of the toughest times for Goan
industries. state unable to escape pan-India slowdown
Goan industrialists are finding it impossible to not get affected by pan-In dia economic slowdown.
The last 6-8 months were so bad that some industries had to cut shifts, tell workers on contract to go.
Entire value chains are getting affected, as small businessmen are not able to avail working capital loans from the banks.
Meanwhile, bankers are unwilling to give loans to even genuine borrowers, who don’t know where else to go for funding.
No large industries have set base in Goa in recent times, which shows the seriousness of the situation.