Image for representational purpose only. Image courtesy: Economic Times
On Monday, September 2, it was reported that the growth of the country’s eight core industries has plunged, according to the official data, to 2.1% in July as against 7.3% in the same period last year. This included the steel sector industry which has registered a decline in production growth rate to 6.6%.
Here are some fresh numbers speaking about the consequences of the industrial dip over the livelihoods of the workers.
Well over 7,000 workers of the steel furnace industry in Gujarat have become jobless in the last three months. The figures were presented by the Gujarat Induction Furnace Association on Tuesday, adding that it is due to heavy decrease in the demand within the steel industry, among other things. The industry that is engaged with iron scraps is the latest one to report job cuts due to the economic crisis.
Inamul Haq Iraki, President of Gujarat Induction Furnace Association told NewsClick that this was bound to happen. He commented, “The effect on the steel furnace industry is a chain reaction caused by the downturn in the auto industry.”
“As there is a crisis in industries that consume steel, a demand slump can be observed in the steel industry,” he said, “as a result of which we have been hit tremendously as well.” Going further by the figures presented by the credit rating agency ICRA, the steel consumption in India is likely to grow at the slowest pace in the next three years.
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Iraki further said that out of the 150 units in the state of Gujarat that employed a total of fifty to sixty thousand workers, 50 have already shut down leaving many workers in the lurch. The remaining ones that are currently operational are cutting their production hours.
“In my own unit, the number of workers have been reduced to half and the operations have been restricted to a single shift,” he said.
The unprecedented demand slump has raised red flags for the players in Gujarat’s steel furnace industry. The association has asked the state to intervene and provide concessions in electricity prices and increase in the export rates among other things to incentivise the units to continue the operations.
The figures were yet another bad news for the Modi government which is finding it difficult to revive the Indian economy that is in doldrums. With measures announced by the Finance Minister Nirmala Sitharaman failing to address the problems of lack in demand, the industry is currently looking at a future that is bleak and uncertain.
Also read: Economic Freefall: Growth in 8 Core Industries Slides to 2.1% in July from 7.3% Last Year
The first ones to be hit were the big players causing tremors in the whole market. Tata Steel, as it was reported, is now likely to revise its planned capital expenditure for financial year 2019-20 to ₹ 8,000 crore from ₹ 12,000 crore and JSW steel is to record a decrease in their earnings.
With bad news surfacing every day, it is now turn of the small and medium players to feel the heat of the crisis, relief from which is not in sight, at least not in the near future.