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Here’s Why A Lot Of Entrepreneurs Have Turned Labourers in Tamil Nadu

| Published on June 20, 2018

As they say; Days can change quickly, and people of Tamil Nadu are facing problems which they never even thought about a few years ago. People who used to earn lakhs every month are now working hard to meet their basic needs. Krishna Kumar who now serves lunch with his wife to people in Coimbatore still misses the days when he was living a happy life.


Around two years ago, Krishna Kumar owned a micro-enterprise with a monthly turnover of over a lakh rupees. Eight people used to work under him. But due to the decisions of Government including demonetisation and Goods and Services Tax (GST) cashflow got affected badly and he had to shut his business.

Recollecting the memories of his business, he says, “Earlier I gave money to others. Now I receive money from others by serving food.”

Another example which illustrates the situation in Tamil Nadu is P Pandian’s story, who before 2016 used to own a house with advanced facilities and now earns close Rs. 10,000 monthly which is approx. ten times lesser than what he was earning before demonetisation.


“Earlier, I paid salaries for ten families. Now in less than three years, I’ve been pushed where I was 20 years ago. It’s sad,”

he said in a recent interview.

M Saravanan, who also works for a salary of Rs. 10,000, earlier owned an auto-engineering unit. But due to the over the burden of debt, he had to sell everything and had to work for another unit.

During the last 2 years, 50,000 small and medium industries have shut down in Tamil Nadu and around 5 lakh people have lost their jobs due to the cash crunch after demonetisation.
The situation has arisen because enterprises with a turnover of less than Rs 20 lakh can run their business without registering for GST but big companies only deal with enterprises who follow the GST taxation. Also, several customers pay two to three months later but owners have to pay GST before that.

“The government should give 100 percent exemption to medium and small enterprise owners from GST. Only then, the MSMEs will develop and we can address unemployment to a certain extent.” J James, District President of Tamil Nadu Cottage and Tiny Entrepreneurs Association said.


Only water pump and grinder industry have suffered a 50 percent drop in business as the 13 percent hike in tax after GST was introduced. C Venthan of Alpha Pump Technologies, says he has sacked thirty workers in the last two years.

Industrialists believe that it wastes a lot of time in maintaining the paper and taxation work. It takes up to 90 days to only to register a company. The government is denying this and says that this is not due to GST. Union Minister Nirmala Sitharaman said, “We are not asking anyone to shutdown. If their turnover is less than Rs. 20 lakh they would do business as they did earlier. So if you say GST is responsible for closure it’s not acceptable. We will have to investigate”.

The aim should be solving this issue as quickly as possible because, in the end, these entrepreneurs are the some who produce jobs in the society as the government is lacking to provide sufficient employment to the youth of India.

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