Salt industry in Gujarat fears that it would lose its competitiveness due to the state government's decision of a steep hike in the ground rent of the land leased to the industry for salt production.
The move has added to the cost of production making it difficult for the salt makers from Gujarat to compete not only globally but on the domestic front too.
In February this year, the state government increased the ground rent for the land leased for the salt production by Rs 300 per hectare, pushing up the rent in the range of Rs 1200 - Rs 1800 per hectare in different parts of the state. Earlier the salt units were charged in the range of Rs 700 - Rs 900 per hectare for the ground rent.
"The hike in ground rent has come as a severe blow to Gujarat salt industry's competitiveness. This would put an additional cost burden of Rs 38 per tonne on salt that we sell. It becomes difficult to compete not only in global markets but also in the domestic market with such high tax structure. If the situation continues to remain the same, we may lose our share of business to other states," said a senior official at the Indian Salt Manufacturers Association (ISMA).
However, a representation in this regard has been made to the state revenue minister, Anandiben Patel. "We have had an interaction with the state revenue minister on the issues relating to the salt industry. They have assured to take up the matter and consider a revision of the hike in ground rent under a high powered committee," said Bachubhai Ahir, president, ISMA, who met the state minister in Gandhinagar last week.
Of the six major salt producing states in the country, Tamil Nadu charges Rs 333 per hectare for ground rent, while Rajasthan and Andhra Pradesh charge Rs 247 and Rs 151 per hectare respectively. West Bengal, Maharashtra and Orissa charge ground rent below Rs 100 per hectare. The ground rent constitutes around 10-15 per cent of the total cost of salt production.
"The government seems to be positive with respect to our demands and we are hopeful to get our demands cleared. This will come as a major support to the state's salt industry especially. This is required especially when country's salt production in past ten has seen a petty growth of around 20 per cent against four times growth seen in the Chinese salt industry. This calls for special attention to the salt industry in Gujarat, especially when the state is the largest producer of salt in India," said BC Raval, secretary, ISMA.
In the meeting with the state revenue minister, ISMA also took up the several issues that included extension of lease from 10 years to at least 20 years, changes in the conditions of lease, procedural improvements in obtaining a no objection certificate (NOC) for the renewal of an existing lease.
