Capturing business sentiment

By Dinesh Lodha, IFMR Finance Foundation

As part of our data collection efforts that involved mapping infrastructure and conducting household surveys, we also reached out to local businesses of the town to get a pulse of the local business environment.

It is said that Tipu Sultan had during his reign invited skilled craftsman and artists to settle in Srirangapatna. This clearly has had a telling effect, in the fact that the town is still known for the quality of its craftsmanship especially in relation to woodwork. I had the opportunity to meet Mr. Manjunathan, a bullock cart maker. His family has been involved in bullock cart making for generations and he had inherited this tradition from his father. It was humbling to see him treat his work more as an art than business and the level of detailing that goes into making a simple bullock cart. Like him there are around 10-12 bullock cart makers who reside nearby, a number he confesses, that has been coming down thanks to increasing mechanization. He is not sure if his children would grow up to appreciate, forget practice, this family tradition.

Like the bullock cart makers, most of the small and medium businesses are located in the Ganjam area of the town. The designated Industrial Estate houses enterprises that are into making handicrafts, wood interiors, pipes, copper wires, lead batteries, etc. The fort area of the town, being more populated, has many small retail shops especially on Pete Beedi Road that cater to the local and tourist population.

Industrial Estate

One interesting feature of the local economy is the weekly Saturday market, Santhe. Held every week on an open field behind the local bus station, the market has around 600 shops setting base every Saturday selling an array of items. It is estimated that the market has around 4000-5000 people shopping there every Saturday, with almost 60-70 percent of them being shoppers from Srirangapatna, the remaining coming from nearby villages.

The town has two large manufacturing facilities – Gokaldas Exports (owned by Blackstone, a private equity player) and MK Agrotech, each employing close to a 1000 people.

We tried to make the business surveys as representative as possible, covering the large manufacturers on one hand to small and medium businesses employing 5-10 people on the other. We also met with a couple of association presidents who amongst them represented close to 300 small retail shops in the Srirangapatna fort area. The surveys revolved around gathering basic information about the businesses, supply chain network, strategy and their relative strengths and weaknesses compared to similar businesses elsewhere.

From the conversations it was clear that most of the small and medium business owners were in the town for historic than strategic reasons. Most of the inputs for businesses came from outside and outputs were largely meant for markets outside the town. Issues around labor quality and infrequent power supply were a common concern.

The information gathered through these business surveys was largely of qualitative nature, and is designed to enable us to better appreciate the challenges that people face from an economic standpoint.