Feeder units leaving Punjab

500 firms to set base in Himachal

Disappointed at the bureaucratic red tape, over 500 units of the wire-drawing industry in Punjab are planning to shift base to Himachal Pradesh. Several industrialists are learnt to have visited Damtal (near Pathankot) and Baddi to explore possibilities of setting up manufacturing units there.

"The policies of the Punjab Small Industries and Export Corporation (PSIEC) and Rashtriya Ispat Nigam Ltd (RINL) are not in the interests of the industry. Besides recession, problems like insufficient power supply and poor infrastructure are hitting the industry in Punjab," says Badish K Jindal, general secretary of the Wire-Drawing Federation of Punjab.

Wire-drawing units supply wire rods, the basic raw material, to most of the light engineering industry, including bicycle and sewing machines firms. Nearly 550 units wire-drawing units are located primarily in Pathankot, Jalandhar, Amritsar and Ludhiana.

As per the new policy of the steel ministry, small-scale industrial units can lift their raw material from the PSIEC only, while large units, which lift more than 600 tonnes a year, can take the material directly from RINL. This is costlier, say SSI unit owners.

They say the PSIEC charges Rs 175 per metric tonne more than what is being charged by RINL. "As a result of this, the current price for the raw material is around Rs 30,000 per tonne if procured from RINL whereas it costs Rs 32,000 per tonne if procured from the PSIEC," Jindal added.

Due to this problem, small industrialists did not buy any material from the PSIEC last month, resulting in losses to the corporation. The industry is further troubled by RINL, which, they said, had reduced its allocation by 50 per cent to the industry in Punjab.

Industrialists also say the central excise duty and central sales tax in Himachal Pradesh are only 1 per cent and the raw material being provided by the HP industrial body is almost Rs 400 per metric tonne cheaper in comparison to the PSIEC.

The industry provides employment to over 6000 persons.

Industrialists, who have also now written to the Ministry of Steel, say they would shift base in the case the government failed to do anything.