Those who are graduating with an Engineering degree this year Specifically, Mechanical and Electrical Engineering, will find it difficutl to get jobs They are going to be in a lot of trouble Peenya Industrial Estate, the largest in Asia, with over 12,000 industries, employing about 15 lakh people In the past few days, many media reports have come out saying that Peenya is in the ICU Layoffs, and factories on the verge of closure What has brought Peenya to this critical stage? It all started with the Auto Industry Passenger car sales have plunged to an all-time low In July, a report in LiveMint said that sales in July was the worst in 19 years It fell 31% from 2,90,931 units in July 2018 to 200,790 vehicles in July 2019. The drop in sales has forced major automobile manufacturers such as TATA motors, Mahindra & Mahindra, and Maruti Suzuki to cut down production, shutting down their factories, for three days, 8 days, 14 days at a time… Maruti Suzuki has already laid off 3,000 contract workers How does this affect Peenya? D T Venkatesh, former President, Peenya Industries Association Most Micro and Small Industries are dependent on larger industries As Tier I and Tier II suppliers, we sell our products to them So we get orders only when they have demand Their demand has now gone down and automatically, our orders have also come down In Peenya Industrial Estate, About 30% of the industries supply to the Automobile industry About 50% of the country’s requirement of (CNC) machines are made in Peenya These machines are used in the Automobile industry Demand for these machines too has come down Demand has come down by about 70-80% Many industries have scaled down from three shifts to one Some have even closed Ashwathnarayan Rao, Secretary, Peenya Plastic Manufacturers Association Government of Karnataka banned plastic carry bags Because of this, our business went down by 50% So we switched to supplying to industries We used to supply to the Automobile industry for spare parts, cables, and other small parts Now the Auto industry is also down and our business is also down In my factory, many items, after production are lying in storage because there is no demand Actually, we were running two shifts Now we are down to one We have already laid off 20% of our staff Hubballi, Belagavi, Mysuru, Tumakuru, Mangalore, everywhere, industries are affected After Peenya, Belagavi and Hubli are the two regions in Karnataka with the largest number of small and medium industries. Let’s look at Udyambag, an industrial estate in Belagavi There are over 2,000 industries in this area, majority of them automobile-related like hydraulics, foundry, and machine tools Umesh Sharma, President of the Belgaum District Small Scale Industries Association said that the number of shifts has been reduced and about 100 industries have already laid off 600 employees The situation is similar in Gokul Road in Hubballi, which has about 1000 industries Nagaraj Divate, President of North Karnataka Small Scale Industries Association said that after scaling down to a single shift, there is still not enough work and factories are shut down 2-3 days a week The industries here employ over 20,000 people and about 20-30% of them are facing closure Besides the auto industry, all the associations blamed GST for making the situation worse C Prasad, Former Honorary Secretary, PIA: If we don’t pay GST returns in two months, they cancel the GST registration These kind of stringest measures that the Government has adopted are affecting us directly They may have done these with good intentions But since these measures are affecting us badly, the government should take action No doubt, our Finance Minister Nirmala Sitharaman has introduced good measures and policies but that relief will be nowhere near enough These measures might boost sales in the Automobile sector but it will not be immediate When the global recession happened in 2008-09 In the Peenya industries, so as in the rest of the country, We were all operating at 50% production capacity In that economic situation, the then central government, came to the support of inndustries like us with a special package For one year, we did not have to pay any EMI That interest and EMI, we could pay as a package in the following year That was a big relief for us Because of that, back then we did not feel the hear We expect the same from the present Government Some believe there are lessons to be learnt even in this bad times Sandeep Parvatikar, Director, Unnathi CNC Technologies: I started my business in 2007 and the recession hit in 2008 At the time, we were at the fag end of the supply chain so we were affected first by the recession back then That recession was a great teacher for us We studied which industry was affected by. recession and which was not Based on that, we framed our strategies and policies Now, I don’t do more than 30% business with any one sector Because of that, the recession has not affected me this time That is why I say that recession is a great teacher