Diesel engine firms unhappy over Budget

Budget 2004 has disappointed the diesel engine industry of Rajkot by not announcing any relief measures for the sector.

Told Haresh Vora, president, Rajkot Chamber of Commerce, said: "At present diesel engine firms are paying a 16 per cent excise duty. The industry is facing problems such as high raw material prices and stiff competition from the international market for the last four years. The Budget has failed to provide any sops for this sector, especially in the tax front."

Dhanshukhbhai Vora, secretary, Rajkot Chambers of Commerce, said, "Due to the inconsistent policies of the Central and state governments and heavy taxation, the Rs 600 crore diesel engine industry in Rajkot is passing through a bad path. Our representatives had expounded our problems to the government, but no steps have been taken in the Budget."

"India used to produce 6 lakh diesel engines per year out of which 3.60 lakh were made in Rajkot. But this year the figure has hardly crossed two lakhs. Also, the price rise in pig iron and coal has affected the production of diesel engines."

"Diesel engines made in Rajkot are exported to South America, Kenya, Jordan, Syria, Iran, and Iraq. China is the main competitor in the exports oil engines.

"A 10 hp oil engine produced in Rajkot costs Rs 12,000, while such an engine produced in China costs only Rs 6,500. It is difficult for the sector to stand against the sharp competition due to the price hike in raw material, high tax rates and also lack of technological improvements necessary for the oil engine production," Vora added.