China flavour in Punjab MSMEs' poll season bucket list

As Punjab goes to polls on Sunday, small and medium businesses in the industrial town of Ludhiana—often referred to as India’s Manchester--are vocal about concerns like import from China even while grappling with the local issues.   

“We depend on China for importing raw material for so many things. You can find any quality of products from China," says Parveen Gulati, owner of a zip manufacturing firm in Ludhiana.

China resonates in other conversations as well. D S Chawla, president of United Cycle and Parts Manufacturers’ Association (UCPMA), points out that India is the second-largest producer of cycles, but the difference between China, which holds the number one position, and India, is huge.

“In 2000s, India was producing 13.1 million bicycles. China during that time was manufacturing 55 million bicycles. At that time, steel bicycles were manufactured. China then started producing cycles with alloy steel, which were lighter in nature. We are still struggling to get raw materials used for alloy steel,” Chawla says.

From alloy steel, China moved on to make bicycles from carbon fibre and now is exploring titanium. India is still at level one and struggling to get alloy steel, according to the UCPMA president.

The China hurdle related to import has come in the middle of the long pandemic and micro, small and medium enterprises (MSMEs) are struggling. Be it textile or cycle parts manufacturing, production took a hit in the last five years due to demonetisation and then the pandemic.

“Business toh bekaar ho gaya Covid se (business has become worthless due to Covid ),” Gulati says.

“2020 was not so bad and after the two months (of Covid lockdown), the business picked up. But last year, we were affected a lot by inflation. People don’t have money. When they don’t have money, what will they spend,” he adds.

Many believe that political parties are keen to bring big corporates and new industries, with not much thought for existing enterprises. “What are you doing for existing industries," Chawla asks posing that question to the Congress-led state government. Businesses are dying, he says.

Recently, Gurkirat Singh Kotli, minister for industries and commerce, Punjab, said new industries are needed to encourage economy and employment.

“If you have to boost state’s economy and employment, you have to bring investment. However, from time to time, the government thinks about homegrown industries. Whatever their demands are, it gets heard,” the industry minister said.

The gaps in executing the goods and services tax (GST) are another sore point among businesses here. Because of the system’s inefficiency, tax refunds get stuck, according to Chawla.

“GST is a welcome step. But half of my money is stuck in GST refund. The government says one must file complaints if there’s demand for bribe. But that doesn’t work,’’ says another owner of an MSME unit.

Naresh Gujral, Rajya Sabha member of Shiromani Akali Dal (SAD), a major political player in Punjab, explained that the VAT refund issue is not limited to Punjab, but in many parts, including in Delhi.  

“Most governments decided not to give VAT refunds because they are all cash-strapped. But yes, this is one issue that needs to be addressed in Punjab,” Gujral said.

“None of the governments (central or state) helped us.  We are not supporting any party. When they don’t support us, why should we support them? It’s better to vote for an independent candidate,” another trader argues.

There may not be a consensus on any one candidate, but everyone seems to be on the same page on technology. Chawla, for example, wants tech access at cheaper rates to compete with the Chinese cycle manufacturing firms.  

SAD leader Gujral has promised that if his party returns to power, the first priority will be to revive the MSME sector as they are “job creators”. Small businesses are watching and waiting.