‘Business, trade lost Rs 75,000 cr in 2 years’

Perikal M Sundar
Past President, Federation of Karnataka Chambers of Commerce and Industry

While the last two years have hit trades and Windustries hard, some recovery was seen by the start of 2022. The third wave of Covid-19 however, had a little less impact compared to the previous waves. Out of our 80 lakh registered employees, 30-40 lakh have lost jobs since the pandemic began.

The loss incurred by the trade and business community is estimated at Rs 75,000 crore and the major portion of the loss was contributed by the statutory payments that the businesses had to make even if they were shut. It would take at least two years for businesses and medium and small scale enterprises to recover from these losses.

To make things harder, the cost of raw materials has doubled in recent times. The rise in prices of fuel, pulses and edible oil also burdened the trade and industries. The FKCCI had submitted 50 memorandums to the Central and State governments expressing concerns and making suggestions. While the government has addressed some grievances, many demands remain unfulfilled. Some of those demands included reducing the power tax from 9 per cent to 3 per cent. Another was a recommendation to the state government to source all its procurements from local MSMEs. On fuel price hike, currently the Central government is levying 30 per cent on excise duty and the state government is levying 35 per cent as tax on the basic price of petrol and diesel. The Central and state governments were requested to reduce the excise duty and tax to about 15 per cent on petrol and diesel.

For now, the hospitality sector is slowly picking up, but the covid scare still prevails. The number of people within the state visiting tourist places is good, but inter-state tourists are still not coming. Textile and garment industry is yet to pick up. This too will improve slowly, and GST collection will further pick up. There is a lot of scope for employment generation in Karnataka. We are expecting more industries to come to Karnataka, especially after a number of initiatives taken by the state government. In one or two years, Karnataka will be among the top three states in India as policies are good, the government is pro-industry, and considers suggestions or demands made by industry for ease of doing business.

Initiatives announced by the Central and State governments are helping industry, and in the revival of the economy. I hope everything stabilises within the next six months and India will be the first country in the world to witness economic revival post the pandemic.