It's hard times for Batala foundry units

Abolition of freight equalisation policy hits Batala cast iron & machine tool manufacturing units

The once famous foundry units of Batala are now in a sorry state. Ninety per cent of the foundry and machine tool manufacturing units have downed shutters and the remaining ones are striving hard to sustain themselves. Though Minister of State for Industries Ashwani Kumar has advocated the upgrade of the industry, the situation is still grim.

Batala was one of the biggest centres for cast iron and machine tool manufacturing. The machinery produced here used to be of high quality. There was a time when 788 cast iron and 1,344 machine tool manufacturing units were functioning here. But now, only 10 per cent of them are operational. Among the famous units which closed down were Agriculture Industries, Khalsa Engineering, Royal, Micro and Janaki Steel Rolling Mills.

Experts in the industry opine that the apathy of the state and central government and militancy were main reasons behind the downward trend of this industry. They say, nearly a decade ago, the area was almost inaccessible to traders and customers from others parts of India due to militancy which was at its height then. The overall development in general and industrial development in particular came to a grinding halt during that period.

Industrialists and traders siphoned off their surplus money to other parts of the country with the result that Ludhiana, Faridabad and Agra and far off places as Secunderabad flourished at the cost of Batala. The government did not pay any heed to the dying industry.

Talking to Business Standard, Rashtriya Engineering Works Executive Director Rakesh Goel said, "As if it was not enough, the abolition of freight equalisation policy proved to be last nail in the coffin of Batala's industry. This abolition of the freight equalisation policy by the central government put the industrialists of this region at a great loss financially vis-à-vis their counterparts in the other parts of the country."

He added that the dying units are looking forward to the state government for grant of a special package so that their locational, geographical disadvantages can be neutralised and they can compete with their counterparts in the country.

In order to revive this traditional industry, Goel suggested that the government should reintroduce of ceiling freight on iron & steel materials, which was introduced by the Congress government but was withdrawn by the last NDA government."

On the Batala units' chances of revival, Rakesh Aggarwal, proprietor of Imperial Foundry & Iron Works, said, "Rationalisation in excise duty structure, based on fixed or turn over basis instead of on percentage basis, is a must. Excise duty on cast iron products, i.e cast iron pipe fittings and manholes must be on optional basis like in the textile sector."

Goel added that as most of the units fall in the SSI sector, bank interest on loans taken by the units should not exceed 7 per cent per annum.