State of the Economy 2018

White-Collar Dreams

Business is looking up in Nashik and Aurangabad, but labour issues — rising costs, shortage of skilled workers and unionisation — continue to play spoilsport

Photographs by Vishal Koul

It’s a long trudge, really. The 180-km stretch from Aurangabad to Nashik — both key industrial pockets in Maharashtra — mirror the state’s apathy towards the two cities. In both the cities — home to a substantial number of manufacturing units catering to automobile and pharmaceutical sectors — access to skilled labour is a much-voiced concern. The higher proportion of SMEs — 75% in Aurangabad and as much as 90% in Nashik — only compounds problems. While enterprises are emerging out of the long shadow of the Goods and Service Tax (GST) and demonetisation, the road ahead continues to be fraught with uncertainties.

No skills, all labour
Milind Kank, managing director, Yeshshree Press Comps based in Waluj, close to Aurangabad, manufactures auto parts for clients such as Bajaj Auto and Piaggio. Yeshshree logged 15% growth in sales and its largest business is manufacturing sheet metal. It is expecting to clock revenue of Rs.400 crore in FY18.  

With the younger generation moving towards the services sector, the shortage of skilled labour has Kank fretting. “The rising cost of raw materials and labour is not as much a worry as getting skilled labour is. Dearth of talent has worsened over the past three to five years. Opportunities in the service industry, such as hospitality and e-commerce seem more remunerative for today’s generation,” explains Kank, who has a 1,200-strong labour force. 

Even by the most conservative estimates, manufacturing units such as Yeshshree have attrition rates, of well over 15%. “We have to make compromises while recruiting because of the lack of options,” says Kank. Companies need to spend time and money on imparting necessary skills. “The Industrial Training Institute’s graduates are simply not skilled enough. The industry is being used like a training ground by most people who join,” says Prasad Kokil, president, Chamber of Marathwada Industries and Agriculture. The prevailing situation is forcing companies such as Yeshshree to invest more in technology. 

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