The economy is going south and industries are worried. Then, there is the migrant problem to contend with. Where will the workers come from, once factories and infra projects start in full swing. To find the answers, TOI speaks with Kirit Joshi, co-founder and director of Spacewood. The over Rs500 crore city company, now flush with FDI from a Japanese conglomerate, had opened several showrooms and was on an expansion spree just before the lockdown.
Excerpts from an interview ...
What are the problems being faced by industries?
There are multiple challenges and it is not just one problem. The largest problem is one of consumption. If consumption is less during this period, it filters down to the factory. Inventory has not moved in the last three months, and we don’t know what the future is going to be. So that cascades to a bigger problem in the coming period.
How do you view what is happening with migrants? Will they have the confidence of returning to work?
We are opening up the economy again and they migrants should have been held back. The government should have given them the confidence to stay back. The migration is happening even as we are trying to ease the lockdown, resume industrial activity, and open up construction sites. They should have been incentivized to stay back. For infrastructure projects, this is going to be a big challenge.
NGOs are doing their bit to hold back migrants, isn’t it?
Out of 100, only 5-10 are staying back. Employers are unable to give assurance that they will be employed and given money. An NGO can’t do anything beyond supplying food and helping them in some way. Migrants needed long-term assurance. Confidence has to come from different angles. That is missing.
Did you try to hold back migrants in your company?
In the industrial scenario in Nagpur, there are not many migrants, who are largely into infrastructural projects. In industries, there are casual or permanent employees. The casual workers are from nearby areas like Gondia, Wardha or Bhandara, and none from West Bengal and Bihar. If you go to Guwahati or Sri Nagar, you will find people from Bihar or UP. Primarily, migrants travel from these states as there are fewer opportunities in their own states. Also, the local people are not so hard working as the migrants. They don’t want to work on road or bridge constructions. It’s sad, but that’s the way it is.
Are you having regular conversations with other industrialists?
I am involved in two kinds of discussions. One, among local industries about industrial products, auto components, packaging and others. Second, with those in the furniture business. The local discussions veer towards wages, issues due to lockdown, permissions and primarily on government regulations. At the national level, we discuss the future, steps to be taken for furniture industry, and how to survive and sustain during the crisis.
The mood must be tense.
Some days it is up and on other days down. Lately, it is more cautious rather than cheerful or sad. Everyone wants to conserve cash as we don’t see a good future. It is also tough to deal with lockdown problems. Nervousness and frustrations are increasing.
Do you discuss layoffs and salary cuts?
Of course. Employers feel layoffs are a better option, it is the only remedy left. There are less chances of the white-collared losing jobs. There are two kinds of fights happening: From the health point of view and the survival of a factory or business model. If both have to survive, both will have to take cuts, face restrictions. Pain has to be suffered by everyone. If the cash flow is good, there will be no layoffs. You may be a strong company but with no cash flow. What do you do then? It is very tough.
Sinking economy vs human health. What do you save?
Both have to be saved parallelly. India is lucky that there are fewer deaths. We should emerge from the health issue soon if we fix the fatality rate. The virus spread cannot be controlled beyond a point. Once lockdown is lifted it will spread. Death rate here is pretty low as compared to international numbers. If deaths had been higher we could have said health issue is not fixed. We are not economically strong. The government cannot fund people endlessly as we are not as cash rich as US or countries in the European Union.
What’s been the response of your Japanese investors?
We are conversing with Sumitomo Forestry at regular intervals. They are a 300-year-old conglomerate and have seen many ups and downs. World Wars, plague, Spanish flu ... they have gone through all this. The company is very mature in handling such situations. We discuss various scenarios, the measures we are taking, the global effect on furniture companies across the globe, which economies are doing well etc. The discussion helps us explore alliances in the future. We also discuss what furniture companies in Indonesia, China and Singapore are doing. Have their sales dropped? Would it be the same in India?
States are tweaking labour laws. Maharashtra too has done it.
Two things are happening: States are acting on their own and so are the courts. The Supreme Court is saying one thing, the high court is saying another and states are not following rules. There will be so much litigation. Unless things settle, nothing can be said. Who do you follow. the courts or the government. Some states are saying it is OK to fire employees. There is so much turbulence now. Best to keep quiet for some time now and see what is best for your organization right now. I have to survive first. I will talk to my workers and people. If I follow government diktat, my company will not survive beyond 2-3 months. What is relevant now may not be applicable later too.
Is it possible to open up industries with Covid-19 rules in place?
The death percentage is very low here. People who have died were primarily sick or ailing. There are rare cases too of a health person getting infected. But with precautions in place, we need to be aggressive and courageous. Things need to normalize in green zones with norms and safety measures in place. Some measures, like maintaining 6 feet distance, are difficult to follow. It cannot be done on the assembly floor. But with masks, sanitizers and washing of hands, work can be done. Companies, individuals and firms can take decisions on their own. I have been talking to my Chinese suppliers. They say things are normal there. Masks are not a compulsion unless you are in a theatre or public area. Usage of masks in factory is reducing.
So, what will be the new normal?
There will be temporary and permanent changes. Interacting on video will be high, convenient and productive. I can hire talent from across the world. The temporary changes would be distancing. Hygiene will be a priority. Namaste will do but there will be no hugging.
Government coffers are empty and industries are unlikely to get any sops.
We are aware that tax rates will not go down. People will have to be encouraged to increase consumption. For one year, government will have to give a stimulus to industries. Banks will have to increase credit limit and play an aggressive role not just to help industries but consumers too. Consumers will have to be given finance facilities to buy new homes, consumer durables and automobiles. Sops just for industries will not help.
When should the stimulus come in?
This is the right time. Sentiments are low and scary. The Aam Admi is scared of losing job and income. The industry is trying to reduce costs. The government has to step in now. US, Italy and some countries are pumping in money. Wages are being reimbursed by different government from various funds. There has to be some tangible action by our government.
If you were the PM, what is the one thing that you would change?
Stimulus is what comes to my mind. I would pump in money like anything. Flush money to people through banks and finance firms so that the consumption goes up. If you pump blood, the body will work. Similarly, the economy will work if people have liquid cash.
You have been doing quite a lot for the welfare of stray animals.
After adopting a stray in 2008, a stray dog became my close buddy. I am a son of a farmer and animals like cows, buffaloes, dogs have been part of my eco system. Along with some activists I have been supporting stray animals, facilitating their adoption and paying for their medication. Now, strays are not being fed, earlier the restaurants would do that. Everyone is working for migrants, I want to do something for strays. If they die, many diseases will crop up that one cannot imagine. Some even more severe than Covid-19. All of us have a moral responsibility. If you find a stray dog or animal, please feed them is my appeal.
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