Surat powerlooms plug in to Maharashtra as costs spike

Electricity tariff in Maharashtra is Re 1 per unit as against Rs 4.5 in Gujarat

Although Surat is the biggest centre of manufacturing man-made fabrics in the country and is known as the textile city, there are increasing indications that many powerlooms of Surat might shift base to neighbouring Maharashtra as cost of production there is much less.

The city is home to over six lakh powerloom units but chances of many of these units shifting to Navapur in Maharashtra are increasing with each passing day.

The main reason behind this possibility is the huge difference in electricity tariff. While Maharashtra is charging Re one per unit from these powerlooms, Gujarat charges Rs 4.50-5 per unit.

Manu Patel, president, Federation of Gujarat Weavers Associations (FOGWA), said, "Electricity consumption by powerloom units is generally high and power tariff plays an important role in determining the cost of grey cloth. The difference in power tariffs of the two states is so vast that costing of grey cloth manufactured in Maharashtra would be much less than that manufactured in Gujarat. Under these circumstances, it is only natural that several powerloom unit owners are contemplating a shift to Maharashtra."

"Local powerloom industry is already passing through a critical phase due to recession and overproduction, and if such units come up in Navapur or other places in Maharashtra, our problems will only increase. It will probably be the final nail in the coffin of the local powerloom industry," Patel said.

Other than cheaper power tariff, another reason behind local industrialists preferring Navapur over Surat is the fact that the land prices in the former are much lower.

Said Tejas Kapadia, who has established a yarn manufacturing unit of 22-tonne capacity in Navapura, "Land prices in Navapur are very less. I had two options for setting up the unit. One was Silvassa and the second Navapur. Silvassa already has many industries and is very congested, so this was also a reason for opting for Navapur."

The strategic location of Navapur is also playing an important role fueling this trend.

Said a leading weaver, who is also planning to set up a unit in Navapur, "The town is just 90 km from Surat, so traveling frequently is not a problem. Even if we manufacture grey cloth in Navapur and supply the same to Surat, the costing, including transportation charges, will be less than grey manufactured in Surat."

Sensing the huge potential for developing Navapur as a major industrial centre, Maharashtra has laid a red carpet welcome for such units and it has announced various incentives for the industries.

Other than cheap power, Maharashtra government is offering various relief for infrastructure development, unit construction and technology upgradation, industry sources said.

It also plans to set up an ultramodern weaving park in Navapur and apparel parks at various places in the state. The incentives and facilities are too good to resist and hence the fear among local industrialists is very much justified.

At the same time though, it should be mentioned here that local industrialists are not very happy with the attitude of the Gujarat government.

Said another leading weaver, "While Maharashtra government is offering sops to attract industrialists, the Gujarat government is doing exactly the opposite. Chief Minister Narendra Modi had announced 10 per cent subsidy for powerloom sector more than a year back, but we are yet to get any relief."

"The state government seems to have adopted an anti-industry stance, which is badly hurting the local industry. We have made numerous representations for abolition of Cenvat (central value added tax), but the state government has not taken any steps in this regard," this weaver said, adding, "when the government is least bothered about our well-being, why should we not shift to Maharashtra or some other place?"