FARIDABAD, India — Power goes off as we drive into Harjit Singh's factory in this dusty industrial zone on the outskirts of India's capital New Delhi.
Singh, who makes fasteners and nuts for automobiles, turns to a heavy-duty generator lying in one corner of the factory floor as his workers struggles to switch it on. An elderly employee surrounded by idle machines continues his work with a handheld metal file.
In energy-deficit India, factory-owners like Singh – classified as micro and small enterprises – suffer routine power droughts like this. Still, these small companies manage to account for 39 percent of the manufacturing output and one-third of the country's total export.
The Indian government says this sector, spread over 12.8 million enterprises, employs an estimated 31 million people – a labor intensity four times higher than large enterprises.
But Singh says it is in a crisis now. "We are facing a business crunch, a major business crunch due to the economic slowdown," he laments as his machines rumble to life as power is restored.
He tells me that manufacturing activity has dropped considerably because of falling orders. Singh is caught in what he calls a "debt-trap" because costly banks loans to keep the business running.
His biggest worry is a permanent shutdown caused not by shoddy power, but by the financial crisis. In the past year he laid off 20 of the 38 workers. His sales are only one-fifth his 2007 volume. "I can’t help it, I can’t survive. I have to survive on the bare minimum," he remarks.
The trouble on Singh’s factory floor belies rosy headlines in the Indian press. "Get, set, grow," read a headline for the Hindustan Times. "Good news: At 6.7%, GDP grows more than expected," said a Times of India headline the same day.
But for Singh, it's unclear what lies ahead. He hopes the government will promote more bank loans for his ailing automobile sector, tax concessions and a curb on Chinese imports to keep his business from closure.
"Something has to be done immediately; otherwise we’ve had it," he says.