Coronavirus deals big jolt to small businesses in Bengaluru

lost income

Abdul Jaffer (Asgar) is stitching again. The sewing machine in his tailoring shop, Royal Tailors, is no longer silent, but he is not happy.

“I usually make up to Rs 50,000 during Ramzan. This time, I have only earned Rs 2,000 since I opened the shop,” he grumbles.

Bengaluru, the Silicon Valley of India, is limping back to normalcy after businesses were allowed to open. But will they flourish like they used to before the crippling lockdowns is the big question.

Follow latest updates on the COVID-19 pandemic here

One of the sectors badly hit by lockdowns is garments. Bengaluru is home to around 900 factories employing about 3 lakh workers.

Sajjan Raj Mehta, former President, Karnataka Hosiery and Garment Association (KHAGAS), says April and May contribute 40% to the annual business. “Summer months and Ramzan festivities contribute heavily to the sales. Since garment is a discretionary product, we don’t see business coming back soon,” he says.

Syed Samiullah, a fruit vendor in Halasuru, says he is mired in financial difficulties.

“I used to do business of Rs 8,000 every month. Now, it has come down to Rs 2,000. I buy fruits worth Rs 12,000 every two days. Some days I make money, most days I have to discard the unsold fruits,” says Samiullah.

Mohan Mani, Researcher at the Centre for Labour Studies at the National Law School of India University, says demand has collapsed.

"In the absence of economic growth, there is no demand for products. Hence the low off-take of credit even when interest rates are lowered,” says Mani.

Sevendhi, who runs Riya beauty parlour, used to make 25,000-30,000 a month. “There was no business for two months, but I had to pay rent of Rs 7,000. I also have to pay my employee Rs 10,000,” she says.

There are over 37,000 salons in the city. Most of them did not have any income during the lockdown.

Satyanand M, Secretary, All India Trade Union Congress (AITUC), Bengaluru, says the unorganised sector in the city is dominated by construction workers. “We can safely assume that there are at least 8-10 lakh construction workers in Bengaluru. Around 2-3 lakh workers have already left," he says.

G Sathis Kumar, Associate Professor of Economics at Presidency University, says the reverse migration of unorganised sector workers will have a big impact on Bengaluru's economy.

"If we are not able to reverse this reverse migration in the days to come, manufacturing sectors like automobile, steel, cement, mining, and real estate, and services sectors like food supply, transport and logistics will see at least 30% decline in growth in FY21," says Kumar.