Ease of Doing Business for MSMEs: Labour shortage last year choked businesses engaged in activities that were exempted from lockdown restrictions. Many small businesses became casualties of the pandemic but MSMEs surely had their back against the wall with the consequent labour crunch due to restrictions in movement. This turned alarming particularly for markets that operated seasonally. For instance, segments of the seafood industry wherein the procurement happens for around 10 months, from March till December, with May and June being the peak months.
Kolkata-based Yogesh Gupta who runs Megaa Moda, which is into processing, packaging, and exporting of shrimps and prawns, was down to only 100 odd workers at his plant in Howrah when the lockdown was enforced in March last year. Gupta usually gets around 600 contractual workers for 10 months who leave by December-end and begin to return by mid-March. However, Covid restrictions left Gupta with a severe shortage of around 500 workers.
Lack of labour meant Megaa Moda going out of business during the peak season even as arranging 500 workers at a short notice was no less than a herculean task for Gupta during the lockdown. Importantly, fisheries was one of the activities allowed under lockdown. So, Gupta explored getting workers from other sectors and lines of work, who had no clue about seafood processing and packaging, but were looking for jobs as sectors they were involved in weren’t exempted to operate during Covid. This also included workers who were new to the job market. Gupta eventually managed to get around 100-150 such workers, enough for him to at least pay his plant’s overhead costs instead of down to nothing.
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“In fisheries, January-March is maintenance period as there is no raw material available during this time. During the cold season, shrimps and prawns don’t breed much and hence it is a lean season. So we utilise this time for plant maintenance. With a total of around 200-250 workers, we managed to operate at least 30 per cent of our production capacity. While output was impacted but it was enough for us to keep our three cold storages running and pay for electricity bills of around Rs 12 lakh per month. The additional cost incurred was around Rs 2 lakh on new workers but I was able to save approximately Rs 6 lakh per month during the lockdown. The fishermen and contractors of the fishermen were also out of job. So, we managed to get them onboard. It was a win-win for us and these workers as well,” Gupta told Financial Express Online.
In June, when the government eased Covid restrictions, Megaa Moda was back to its full capacity of workers at the plant. In comparison to the April 2019 procurement of 150 tonnes of shrimps and prawns, the company could only procure 50 tonnes in April 2020. “We were badly hit during those three months (March-May) but we were able to recover in the subsequent months,” said Gupta. In FY21, Megaa Moda posted Rs 189 crore turnover, down from Rs 197 crore in FY20. The company is expecting to close FY22 at around Rs 195 crore. “99 per cent of our goods are exported globally to around 40 clients while this year we started supplying domestic as well,” added Gupta.