Nandigram Effect: Business Takes A Beating

The simmering Nandigram issue in West Bengal got worse as the protestors ran
riot on the streets of Kolkata. While politics came to the forefront, the
economy has taken a beating with frequent strikes, shutdowns and riots. The
channel community is no exception and the political turmoil has left them
helpless and baffled, counting their losses

Industry experts aver that these losses are bound to cause a direct impact on
the cumulative growth rate for the ongoing fiscal. Commenting on the same,
Jaydeep Agarwal, Business Head-Sales and Operations of Kolkata-based Eastern
Comnet said, “The trouble surrounding Nandigram and Singur has been going on for
the past one year, and in this time, I think we have lost around 20 percent
work-days in the form of bandhs, strikes, roadblocks, etc. This is indeed very
unfortunate for a developing state like West Bengal.”

Supporting his views, Ujjal Das of Burdwan-based Ulex Computer remarked,
“Burdwan is one of the worst affected areas in West Bengal, where life has been
crippled due to the bandhs by different political parties over the Nandigram
issue.”

With the disturbances spilling over in the state capital quite frequently,
business is slowing down and the effect can be felt all over eastern India. The
number of bandhs or roadblocks caused in different parts of West Bengal in the
last one month has paralyzed the entire business transaction of Eastern India.
“The IT sector has been worst hit with major financial as well as other losses,”
observed Dilip Agarwal of Guwahati-based Infotech International.

Upcountry partners like Agarwal largely depend on Kolkata for their business
transactions, and the last few shutdowns and violent incidents in West Bengal
have affected them badly.

“I had placed an order with a certain company and it is pending for the last
10 days, since the concerned person has not being able to complete the
transaction owing to the bandh. Naturally, my business is suffering since I
misssed my own commitments to my clients,” Agarwal elaborated.

Neighbouring cities

Jamshedpur-based Computer World has also been hit by the ongoing political
turmoil in the state. Its Director, Abhay Upadhyay stated, “Each one of us has
to depend someway or the other on Kolkata for our business needs. And with this
continued standoff, we are seriously affected. In the last one month, we have
lost over 20 percent business which will definitely affect our growth for this
fiscal.”

Most upcountry partners depend on Kolkata for their material supply since all
the distributors' regional or head offices are situated in Kolkata. The
roadblocks and shutdowns have lead to material supply being delayed, which has
seriously affected the sales.

“I had ordered some products before Diwali and it was scheduled to reach us
by November 12 or 13. But these incidents have delayed the delivery and we
received the material quiet late. In the meantime, the order got cancelled and
now we are in trouble,” lamented Rajesh Nanda of Bhubaneswar-based Infocare
Solutions, who has incurred losses of around Rs 8 lakh.

For Das, the cause of concern is even more severe. “I was almost on the verge
of losing one tender since I could not deliver material on scheduled time due to
these bandhs. We are also facing major problem in receiving and delivering
materials as the entire transport system is affected.”

Consignments are not reaching destinations in West Bengal on time from
Kolkata. The violence, which took place in Kolkata on November 21, was followed
by road blocking and rioting due to Nandigram crisis. “We also lost some part of
the consignment as the trucks that were ferrying the goods were stopped at
several points. That apart, the sales have also slowed down tremendously.
Business is down by almost 50 percent,” Das informed.

Not only channel partners but also bigger companies like Amconics and
Supertron Electronics, which are head quartered in Kolkata are facing a setback.
“Due to the ongoing political disturbances over the Nandigram issue all our
business commitments are getting affected. Being a national operator head
quartered in Kolkata we import our Supercomp materials through Kolkata port and
supply it all across the country. These disruptions have hampered our delivery
system and we could not meet our schedules. This in turn has also affected the
payment cycle,” said VK Bhandari, MD, Supertron Electronics.

“As transport was affected due to the recent disturbances in West Bengal,
certain problems were being faced in South Bengal due to road blockage. It was
obvious that the goods were not being delivered on time for which we were
supposed to answer to our clients/customers,” informed KK Dutta, RSM-East,
Amconics Infotech Solution. The company faced major harassments as all its
shipments to the Kolkata port was delayed by a week or more.

“Considering all these facts I believe we will have to incur approximately 15
percent loss on our cumulative growth rate for this FY. We are all now helpless
and directionless as we really don't know how much more loss in all terms we
will have to face,” informed Agarwal of Eastern Comnet.

“The total business cycle has been jeopardized due to these political
upheavals is the state. The shutdowns have become a menace for us,” remarked
Pankaj Agarwal of Siliguri-based Tejpal and Sons, who has suffered a loss of 35
percent in his overall business so far. “Adding to that, North Bengal has once
again been crippled by bandhs called over some Gorkha related problem, so you
can imagine what the businessmen and common people are going through,” he added.

“Also, if the material supply gets delayed we are not getting payments from
our customers and neither can we pay the distributors. So the entire payment
cycle is damaged. Sometime we have to take additional loans to accommodate the
financial hit and end up paying more interest which ultimately affects the net
profit,” he added.

But that's not all. Apart from business, many vendor events were either
postponed or shifted out of Kolkata because of the unrest. The worldwide launch
of Intel's nextgen technology 45 nanometer was scheduled to be held in Kolkata
but because of the bandh Intel was forced to shift its venue to Bangalore.
“Since it was a worldwide launch it had to happen that day only and the
political disturbances which are beyond our control forced us to shift the
venue. These political disturbances are actually daunting the spirit and health
of business in the state and every one is now very cautious,” informed a source
from Intel.

Similarly Acer had its partner meet scheduled on November 22, but the
violence in Kolkata compelled the company to call off the event. Now, as most
partners pointed out, it's a wait and watch situation and all the IT community
can do is sit back and count its losses and hope that the situation returns to
normal soon.

PIYALI GUHA

piyalig@cybermedia.co.in