1,500 brass parts units down shutters

High tax, obsolete technology, competition stifle the industry

As many as 1,500 brass parts units in Jamnagar have closed down due to recession in the industry, lack of modern technology and stiff competition from China, factory owners said.

High sales tax levied by the Gujarat government is forcing many brass parts factories to migrate to other states, they said.

On Wednesday, Jamnagar Factory Owners' Association made a representation to the chief minister Narendra Modi seeking his intervention for the survival of the remaining 4,000 brass parts units in Jamnagar.

They requested the state government to include the industries under the cluster development project to protect the units.

The association in its representation said the only small sector industry of Jamnagar is facing many difficulties regarding raw material and transportation.

Brass parts units are migrating from Jamnagar as several other states and Union Territories are offering them tax concessions.

The Rajasthan government is levying one per cent tax on brass, copper, zinc and lead. Union Territories give tax concessions and a special relief is given by the Uttaranchal and Chhatisgarh governments, the association said.

The association said a team of the Institute of Industrial Development in India, based in Delhi, had visited 1,500 brass unit and suggested technology upgradation and quality control for the survival of the industry.

Many more units in Jamnagar are likely to migrate to either Rajasthan or Union Territories because the sales tax in Gujarat is four per cent. High cost of raw materials makes this tax unaffordable for the factory owners, the association said.

At present, the structure cost per kg is Rs 3 to Rs 6, which is more than the profit margin of the units. High tax rates lead to evasion, resulting in revenue loss to the government, the association said.

The association has requested the state government to bring down the tax to one per cent to eradicate tax evasion and help the struggling units.

The association said land prices in the Jamnagar Gujarat Industrial Development corporation (GIDC) area are very high compared to any other GIDC in the state.

The association urged the state government to make it affordable. The current transfer fee of Rs 7.50 a sq ft should also be cut, it said.

The association also called for introducing third party sales in the wind farm sector as Jamnagar is a potential centre for wind energy.

It said this will attract more investors to wind farming, earn more revenue to the state and boost power production in the region, besides creating huge employment opportunities in the backward regions of Kalyanpur and Dwarka talukas.

The association also demanded urgent measures to save the brass parts industry.