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Manufacturing industry to cut 10-30% jobs

Views 1 Views    Comments 0 Comments    Share Share    Posted 10-12-2008  
10 Dec 2008:

NEW DELHI: The PM`s economic stimulus package has failed to lift the sagging morale of industry, in particular the labour intensive manufacturing
sector that is on the verge of cutting down manpower by 10-30% in the next three months due to massive slowdown in demand and a cut in production of up to 30%.

According to a survey being conducted by the Federation of Indian Chambers of Commerce and Industry (Ficci), manufacturers in sectors like textiles, metal, capital goods, leather and chemicals have planned to cut production between 10-50% by March 2009 owing to sluggish demand.

The textiles, leather and metal sectors are expected to clock negative growth of 3.9%, 13% and 30% respectively, the report said. While metal products industry reported a negative growth of 17% in August, textile and leather segment slipped in the red in September, both registering negative growth.

Not only has domestic demand come down, even export orders have fallen substantially. In the leather segment, the report said, export orders have declined by more than 60%.

"Textile exports are expected to decline by around 10% in October 2008, maximum impact is to be in the leather sector where on an average orders have declined by 62%," it added.

This, the Ficci survey pointed out, would result in some units downsizing manpower in the range of 10-30% in the next few months in sectors like textiles, metals, leather and jewellery. However, capital goods and chemicals industry may escape the pressure on lay-offs.

The industry chamber said the PM`s stimulus package failed to address some of the major demands of the manufacturing sector. It said interest rates were still high, more than 8-10%, while the demand of textile sector to increase duty drawback rates and interest subvention at 4% still remained unaddressed.

The sample size of the pan-India survey was close to 200 companies and included large, small and medium enterprises.

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