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72% MSMEs will reduce their manpower: AIMO Survey


NEW DELHI : At least 72% of the micro, small and medium enterprises will reduce their employee count, a survey by the All India Manufacturer’s Organisation (AIMO) found, underscoring the magnitude of job losses in the Indian labour market caused by covid-19 and the ensuing lockdown.


AIMO in collaboration with seven other industry associations, surveyed over 46,000 companies across India and found that the pandemic’s impact on their businesses will lead to massive job loss.


“We received 46,525 responses for our survey. The most striking aspect was that 72% of MSMEs, and 42% of the corporate respondents said that they will definitely reduce their head count to get their business back on track," said K.E. Raghunathan, past president of the AIMO, who was actively involved in the survey. “In fact, only less than 20% of the all the categories said they would continue with the same headcount. The extent of the job loss will be clearer by the end of August as most of the respondents were in the process of gauging how many of their labour will return and also they are currently gauging the optimum employee strength required to sustain their business in the near future," Raghunathan said.


Among MSMEs, 14% said there will be no reduction and another 14% were uncertain. Among the bigger corporate respondents, 18% asserted they won’t reduce employee count and the remaining 40% were unsure.


India’s MSME sector is a big job creator, employing around 110 million people. Any impact on their businesses has a direct relation with wider job loss.

According to the Centre for Monitoring of Indian Economy, the unemployment rate in urban India was 25% and in rural India, it was almost 18% in the week ended 31 May.

AIMO said issues like demand forecast, collection of pending dues, raw materials, future EMI payments along with salary issues were the key concerns for companies. AIMO has been saying that they need money, manpower and raw material at reasonable costs for their quick revival.