Unorganised units irk fan companies

The existence of a strong unorganised sector is the greatest threat to the Indian fan industry as such units accounted for 55-60 per cent of the market but hardly observed the rules governing industrial units or paid the right taxes, the newly elected chairman of Indian Fan Manufacturers Association ( IFMA), and chairman of Polar Industries Limited, Anil Agarwal, alleged at the body's annual meeting here yesterday.

The Indian fan industry nonetheless registered growth of 14 per cent, producing over 109. 5 lakh fans in 2003-04. Exports rose 135 per cent to over 15. 35 lakh fans.

"The increasing export figures establishes the quality of our products" said S K Khaitan, the outgoing president of the association.

Production growth was driven by development of economy model ceiling fans priced Rs 300-400 less than normal ceiling fans. Indian units exported fans to USA, west Asia and some other regions in the world.

"After China, India was second in the world in terms of fan manufacturing but once China adopts WTO rules, competition will be come down", said Khaitan . In the first four months of this fiscal, exports had shot up following large orders from Iraq. Orders from Wal-Mart and other USA-based buyers also helped growth.

IFMA members were unhappy with the 16 per cent excise duty levied on electrical fans. Members said it should be reduced to 8 per cent to bring down consumer prices.

The association said the proposed 12.5 per cent VAT should be cut to 4 per cent to bring the large number of unorganised sector manufacturers into the tax net.