India Inc takes a Rs 25,000-cr hit
Industries in Gujarat were among the worst hit with the textile trade and diamond industry accounting for losses of more than Rs 8,000 crore.india Updated: Sep 05, 2006 15:14 IST
Rs 25,000 crore— roughly the amount estimated by India Inc to have gone under flood waters.
Floods inundated large parts of Andhra Pradesh and Gujarat, drowning production facilities and washing away inventories.
Industries in Gujarat were among the worst hit with the textile trade and diamond industry accounting for losses of more than Rs 8,000 crore.
"The losses were more acute as textile firms had already mass produced garments and sarees for the ensuing festival season. All the stocks are now lost. Diamond traders are estimating a loss of around Rs 200 crore a day," says a Gujarat Chamber of Commerce official.
The losses for industries in Gujarat alone have been estimated at over Rs 15,000 crore, says an Assocham official adding that another 8-10,000 crore have been lost in Andhra Pradesh.
"And as the days pass and cities continue to be inundated, these losses are mounting," the official adds. Major industries in Gujarat — like RIL, ONGC and General Motors India — have been forced to close down their facilities in view of the rising flood waters, while others like Essar Power have been forced to curtail output.
Six power plants of NTPC have also been operating well below capacity for two days due to the gas shortages. ONGC alone is expected to incur a revenue loss of Rs 150 crore due to shutdown of its Hazira Gas Processing Complex.
Besides the gas complex, ONGC was facing 700 tonnes oil production loss from its Mehsana field in north Gujarat due to electrical tripping and short circuit, sources say.
"Several manufacturing units have been hit in Gujarat. Iron and steel, textiles and some consumer durables in Andhra Pradesh have been affected.
Though the flood waters have started receding a bit, the huge maintenance work needed to restart operations at most plants would still be a week-long affair," says a FicciFicci official.
Even diamond stocks — usually kept in paper parcels and stored in basement and ground level lockers — would need cleaning and re-sorting over several days.
The floods, which have already hampered industrial and agricultural output, now threatens to hurt India's economy's growth prospects, say analysts.
The flood-ravaged diamond industry of Surat alone may take 15 to 20 days to get back to normal, after which it faces the prospect of low production with many workers remaining absent.
Surat, which processes 55-60 per cent of India's total annual exports of $12 billion of cut and polished diamonds, has not lost diamond stocks but major damage has been sustained by plant and equipment, say Gem & Jewellery Export Promotion Council officials.
The floods were caused by overflowing rivers and aggravated bythe sudden release of vast amounts of water from dams and reservoirs, which have also hit agricultural land and petroleum, gas and power plants among others.