Covid blues still plague Patparganj MSMEs

New Delhi: Bustle is back in the Patparganj Industrial Area in New Delhi after two years of the Covid pandemic and ensuing lockdowns. Heavy vehicles are loading and unloading goods. Roadside eateries and stalls are busy.

But the disruption has taken its toll. Not all workers, most of them migrants, have come back. Before the pandemic, 535 units in the area employed around 50,000 people; now there are half of that. Almost 100 units, mostly those on rent, have been either shut down or have downsized their operations, says Man Mohan Mehra, general secretary, Patparganj F.I.E. Entrepreneurs Association.

As for all micro, small and medium enterprises (MSMEs), the last few years have been tough for the factories at Patparganj too. Just as they were recovering from the shock of demonetization and then the disorderly implementation of the goods and services tax (GST), the novel coronavirus hit them hard.

Set up in 1990, the Patparganj Industrial Area is among the newer clusters developed in Delhi. But the problems that plague other such estates in the national capital are also its bane—poor infrastructure, bad roads, red tape, corruption.

All government agencies want their pound of flesh, a local businessman says. "Whether we do some construction work or even regular logistics, there is some official who wants bribe. And this is when everything we do is in order."

The 'Inspector Raj' is alive and thriving, says the businessman, adding that the entrepreneurs are left to their own devices.

All the great concern shown towards MSMEs is just rhetoric, as few policy announcements get translated into assistance for MSMEs. For instance, there is the Emergency Credit Line Guarantee Scheme (ECLGS), which was extended by a year till March 2023. Then there are production-linked incentives (PLIs). These have not helped Patparganj MSMEs.

Quite apart from the problems faced by all MSMEs and industrial clusters, the Patparganj Industrial Area has its own specific issues. A big one is the absence of potable water supply. "Every factory has to buy bottled water, which adds to the cost of the enterprise," Mehra says.

For other purposes, the entrepreneurs have to depend on bore wells which, by the way, are not allowed in Delhi. For this, they had to convince the National Green Tribunal to grant them exemption.

As per a 2010 law, Delhi State Industrial and Infrastructure Development Corporation Ltd. (DSIIDC) was supposed to manage, directly or by engaging some agency, the 29 industrial estates in the capital. The engagement was supposed to be on the basis of public-private partnership or PPP.

But this hasn't happened at the Patparganj Industrial Area.

Governments—at the Centre and in states, the incumbent ones and the earlier ones—always lay a great deal of emphasis on manufacturing, as the sector ensures reliable supply chains and employs a large number of people. But manufacturing seems to be declining at the Patparganj Industrial Area.

A variety of service sector companies—from logistic firms like Fedex to auto majors—have opened their businesses in the area. Will the trend pick up? Will service sector firms take over the area? One hopes not.