Even as Gujarat Chief Minister Vijay Rupani is set to conduct a roadshow in New Delhi on Friday for the upcoming investment extravaganza Vibrant Gujarat Global Summit (VGGS), industries in the State are reeling under cost escalations and improper policy implementation.

Raising concern over the deteriorating business atmosphere in the State, the Gujarat Chamber of Commerce and Industry (GCCI) has claimed that industrial production in the State has fallen by about 40 per cent in the past 1.5 years and more units may shut down amid the dismal economic scenario.

Uncertain economy

“This has come as a fallout of multiple factors, including uncertainty on the economic front, improper implementation of GST and the demonetisation. We don’t want such a situation to cloud the Vibrant Gujarat Summit. So we are raising the issue with the government for remedial measures,” said Jaimin Vasa, President, GCCI.

The VGS is scheduled to take place in Gandhinagar in later part of January 2019.

A representation will be made to the State government with suggestions for resolving the issues hurting the businesses — mainly the micro, small and medium enterprises (MSMEs).

Shutdowns feared

Vasa said the industrial crisis worsened in the State over the past four to five years. Urgent measures are required for MSME units, which are at the incipient sickness level. “There is a need to make timely resolutions to avoid the closure of units,” Vasa added.

The overall economic slackness is visible in the elongated payment cycles by about 45-60 days. “All sectors, including textiles, plastics, engineering, chemicals and dyes, are facing tough times. The domestic business is badly hurt, while due to escalation in overall costs, they are losing competitiveness in the international market also. This way they are unable to take advantage of a weak rupee in the exports,” he said, expressing concern large-scale job losses in the State. The textile industry, which is the backbone of multiple sectors, including yarn and dyes, is awaiting announcement of new textile policy in sync with the GST.

Delay in funds disbursal

GCCI also expressed displeasure over the State’s indifferent approach to disbursal of funds to MSMEs under various schemes since April 2017.

“There is inordinate delay even in the release of refunds under GST also. The red-tapism continues despite GST being an online system. Sectors such as textiles are left with no incentive under GST,” said Nayan Sheth, Chairman of the GST Committee of GCCI.

For the plastics industry in the State, environmental restrictions are posing a threat on over 2,000 units, which may result in unemployment for about 50,000 workers, they said.

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