Latest news with #FederationofKarnatakaChambersofCommerceandIndustry
New Indian Express
24-04-2025
- Business
- New Indian Express
Minimum wage hike will kill MSMEs: FKCCI
BENGALURU: Condemning the recent increase in minimum wages across Karnataka, the Federation of Karnataka Chambers of Commerce and Industry (FKCCI) warned that the sharp hike could severely affect micro, small and medium enterprises (MSMEs), especially those in industrial hubs like Peenya. In a discussion held with various member industry associations on Wednesday, FKCCI pointed out that the revised minimum wages, especially in Zone 1 areas, have gone up from approximately Rs 15,000 to Rs 26,300 — a jump that many small businesses say is unaffordable and threatens their survival. According to a study conducted by FKCCI among its member units in the area, around 20% of these units could be forced to shut down if the government does not take immediate corrective steps. Since Karnataka's cost of doing business is now much higher than in neighbouring states like Tamil Nadu, Telangana and Andhra Pradesh, businesses are worried about losing orders and are considering shifting operations to those states. FKCCI members pointed out that the increase is exceptionally high compared to earlier stages and does not take into account the ground realities faced by small industries. Businesses operating on annual contracts and thin margins said they are already struggling with rising costs in areas like licensing, power tariffs and labour. FKCCI President MG Balakrishna said, 'We fully support fair compensation for workers. However, these indiscriminate wage hikes, made without evaluating the actual paying capacity of small-scale industries, are pushing them to the edge. Karnataka will lose its competitive edge in attracting investments, especially in labour-intensive sectors such as textiles, light engineering, electronics and packaging.' He added that if MSMEs continue to struggle, the state may also lose significant tax revenue and employment opportunities as businesses move out to other states. The FKCCI members requested the state government to introduce separate minimum wage slabs for MSMEs, different from those for large industries. It also urged the state to set up a wage rationalisation committee to review the current structure. Additional relief measures proposed include power tariff subsidies, waivers on labour cess and working capital support for small businesses.
The Hindu
23-04-2025
- Business
- The Hindu
FKCCI calls for a quick reassessment of minimum wages to prevent closure of MSMEs
The cost of doing business in Karnataka is now significantly higher than in neighbouring States such as Tamil Nadu, Telangana, and Andhra Pradesh and such cost escalations coupled with an improper minimum wage structure have been putting a lot of pressure on small entrepreneurs in the State, said M.G. Balakrishna, president of the Federation of Karnataka Chambers of Commerce and Industry (FKCCI), on Wednesday. 'The cost of doing business in Karnataka is now significantly higher than in neighbouring States like Tamil Nadu, Telangana, and Andhra Pradesh,' he said. The FKCCI, after wide consultations with member industry associations, has voiced grave concern over the recent hike in minimum wages across Karnataka, highlighting its devastating impact on the State's industrial landscape, particularly on the micro, small and medium enterprises (MSME) sector. Speaking at a special meeting organised by the trade body for its member associations here, he demanded an urgent reassessment of minimum wages to prevent the closure of the MSME units in the State. 'The indiscriminate wage hike, without assessing the paying capacity of small-scale industries, is leading to a situation where many of them are considering shutting down,' he cautioned. At the meeting on Wednesday, representatives of the Peenya Industrial Estate, Asia's largest small-scale industrial cluster, revealed that the increase in variable dearness allowance (VDA) and resultant wage hike has rendered the operations of many small units financially unviable, and consequently, some 20% of units were at risk of closure if the government did not take immediate corrective steps. The high minimum wages, while well-intentioned, were eroding Karnataka's competitive advantage in attracting investments, especially in labour-intensive sectors such as textiles, light engineering, electronics, and packaging, Mr. Balakrishna added. The trade body further cautioned that, if a high wage regime continued, there would be loss of jobs across the State and loss of tax revenue to the government. 'Under a high minimum wage structure, the MSMEs will succumb to closure or decide to shift to neighbouring States where the minimum wages are lower than what they are in Karnataka,' he said. Some of the recommendations made by the FKCCI to the State government include introducing differentiated minimum wage slabs for MSMEs vs. large industries, immediately convening a wage rationalisation committee, and providing relief through power tariff subsidies, labour cess waivers, or working capital support. The trade body also asked the Central government to enforce a uniform national minimum wage ceiling, announce wage-linked incentives or subsidies under MSME schemes, and reduce the regulatory burden on small industries to retain employment generation. The FKCCI also urged various labour unions and civil society outfits to participate in constructive dialogue and recognise the unique vulnerabilities of the MSMEs, which collectively contribute over 45% to industrial jobs in Karnataka.
The Hindu
23-04-2025
- Business
- The Hindu
Industries urged to put their products on display at India MSME Conclave in May
Karnataka Chamber of Commerce and Industry (KKCCI) has appealed to micro and small-scale industries from Kalyana Karnataka region to put their products on display at the three-day India MSME Conclave 2025 scheduled to begin in Bengaluru on May 30. In a pre-event consultation and interactive session organised at the KKCCI Conference Hall in Kalaburagi on Tuesday, KKCCI president Sharanabasappa Pappa called upon the owners of small-scale industries and women self-help groups to make use of the opportunity to expand their market. 'The conclave is being jointly hosted by the Federation of Karnataka Chambers of Commerce and Industry (FKCCI), the Karnataka Small Scale Industries Association (KASSIA) and the Peenya Industries Association. It aims to create a dynamic platform for showcasing products manufactured by micro, small and medium enterprises (MSMEs) from across Karnataka. We encourage entrepreneurs and industrialists from Kalaburagi and surrounding districts to take full advantage of the opportunity to exhibit their products at the conclave. Stalls will be provided for the display of goods, offering local industries a chance to promote their products at the State-level and enhance their business outreach,' Mr. Pappa said. He called upon interested industry owners to contact KKCCI for more information. The consultation session in Kalaburagi witnessed the participation of several key figures from the industrial sector. Among them were the chairman of the Industrial Committee of FKCCI Bengaluru N. Satish, vice-chairman K.M. Shivamurthy, director N. Yashavanthraj and the former president of the Raichur Chamber of Commerce and Industry Trivikram Joshi. KKCCI honorary secretary Shivaraj Inginshetti, the former president Shashikant B. Patil, vice-presidents Kedar Raghoji and Channamallikarjun Akki, joint secretary Girish Ankal and treasurer C.A. Uttam Bajaj and others were present. KASSIA Council members Bhimashankar B. Patil and Channabasayya Nandikul Swamy were among the notable participants, along with local industrialists and businesspeople, including Kiran Kumar Shetkar, Sanganna Gowda Patil, Preetesh Tapadia, Yogiraj Nadar, Girish Gilda and Basavaraj Jogur.
