The once bustling pink city’s bazaars located in the walled city area lie forlorn and quiet today. Before the COVID lockdown, locals and tourists used to throng the famous Jauhari bazaar and Bapu bazaar, drawn to it by the glitter of gems and jewellery, sparkle of embellished lac bangles and colourful bandhej (traditional tie-dye) fabrics.

But hopes are high that shops and workers will be able to return, albeit slowly and painfully. The tourists who kept the city’s economy buzzing will probably not return in the foreseeable future. And locals may not have the resources, or the inclination, to spend after over two months of no income.

Hit badly by the pandemic, Rajasthan nevertheless is hoping to restart its economy using the special package for MSMEs announced by the Centre. As per figures available, from September 2015 to mid-May 2020, 51000 MSME enterprises were registered in Jaipur, employing 3.25 lakh workers.

The focus is on getting units in the industrial areas and export promotional zones in and around Jaipur to gradually open. Only agro-based units, pharma and units making essential goods have been able to maintain some production during the lockdown, all the other units remain shut.

Disappointment is writ large in the MSME sector for the relief measures announced are not what they expected. Not even the collateral free loan offer of Rs 3 lakh crore has aroused enthusiasm.  The list of demands by industry associations has been the same as in other states: mainly waiver of taxes and other freebies.

“Business can bounce back only if interests on loans and other dues are waived,” said Suresh Agarwal, President FORTI (Federation of Rajasthan Trade and Industry). Nine industry associations have already filed a petition in the Supreme Court expressing their inability to pay wages for the lockdown period, with FORTI demanding a one-year moratorium on all payments from the hospitality sector. Even the latest reduction of interest rates by the RBI has evoked little enthusiasm to revive these units.

Currently, the ones that have begun operations are working at 30 per cent capacity. The end of lockdown 4.0, they hope, will enable them to ramp up capacity utilization.  

Major MSMEs in Jaipur city

Industry demands  

Manufacturing, services and renewable energy segments are struggling to regain their feet. Rajasthan has the third highest installed solar power generation capacity in the country at 5000 MW. In Jaipur alone there are 200 solar MSME units each providing employment to ten families. In addition, each provides employment of 50 wage days in a month.

The solar industry demand is relaxation in regulations governing billing of solar power from the state Government. “As factories are non-operational, the power generated from the rooftop solar power plants will not be consumed and will flow into the grid, the provision for which will lapse by month end,” said Sunil Bansal, General Secretary, Rajasthan Solar Association.

Labour is another issue in restarting industry as many workers have returned to their villages and native states. Availability of labour is down to 30-40 per cent of normal times. The government is planning to employ the 2.1 lakh locals returning to the state with skill mapping and skill development programmes to train the unskilled workers. “The cement industry, for instance, is shut due to shortage of labour”, said FORTI’s Agarwal. Though V K Sharma, director of the state government’s MSME department, said that “around 8000 MSMEs, 200 large scale units and 500 cottage industries have started their operations and rest will follow”.

The other issue confronting MSME units is health and safety requirements for their workers, as no facilities are available in the industries for even testing and screening of workers, let alone treatment facilities.

MSME in Jaipur Rural

Reviving the textile industry

This used to be a flourishing manufacturing cluster in Jaipur city for over 35 years, with a sizeable export market. The larger industrial areas of Sitapura, Mansarover, Vishwakarma, Bindayaka and Godam have mostly garment manufacturing units — all in the MSME sector — handling all kinds of fabric to make garments which they used to sell to international brands like Zara, Mango, Carrefour.

These manufacturers, certified with internationally recognized industry working standards, are yet to start operations. Traditional artisans and weavers too have been rendered idle. So badly has the textile sector been hit that “I am thinking of shutting my physical showroom to save on fixed costs as we are assuming negligible walk-in sales even after lockdown,” said an MSME manufacturer of Jaipur kurtis.

Some smaller units were kept going by orders for face masks. “However, now even homemakers are making masks, so pricing is competitive as there is oversupply,” said one such unit owner. “There is no work in the smaller textile units which is contemplating reduction in staff salary or being forced to downsize,” said another manufacturer.

The Garment Exporters Association of Rajasthan (GEAR) have two requests to sustain the industry in the long term. “The Government should ask all domestic brands not to cancel any order placed before March 22 and pay the dues of orders received before lockdown,” said Rajiv Dewan, President.

“Second, income tax should be exempted for 3 years, be 20 per cent in the fourth year gradually going up to the present rate from the 8^th year. This is needed to boost the morale of the manufacturers and exporters, which is very low as without government assistance, 30-40 per cent of MSMEs could be wiped out The textiles sector is the second largest employer after agriculture in Rajasthan with huge export potential. With some help the industry would bounce back within two years, ” added Rajiv.

There are about 500-600 garment units, with 90 per cent of them in Jaipur employing about 6 lakh people with a yearly turnover of around Rs 11,000-12,000 crores. “Sadly, there is no relief as no waivers are given. Any income tax exemption would have given the drive to the industry,” said Rajiv. “There is also disappointment as nothing was mentioned on exports.