Around twelve textile mills were bustling with activity just about two decades ago in the erstwhile ‘Manchester of the east’. As the nation went into the new millennium, the activity has slowed down to the extent of closure.
The Elgin Mill, JK Cotton and Jute mills, Kanpur Textile Mill, Atherton and several others have all but stopped, while the government run Lal-Imli is sick and feeding on the periodic grants from the British Industrial Corporation (BIC).
The story of decline is accompanied with much-maligned strikes and lock-outs, which however failed to revive the official concern and managerial prowess of the operating companies. But there is more than this to the shut-down of multi-crore manufacturing business.
According to Animesh Mishra, professor of business studies at Kanpur University, the location of textile mills in the city had progressively turned unfeasible for the manufacturers as the pace of infrastructure growth in the city lagged behind as compared to parts of Maharashtra. “The southern states became a natural choice for the mill owners due to readily available raw materials and good connectivity with the country’s commercial capital, Mumbai,” he says.
The industrial growth driver of the state, the Uttar Pradesh State Industrial Development Corporation (UPSIDC), has also been shifted, from its present location in Kanpur. The official decision speaks more than that is obvious about the administration’s priority list of Kanpur.
A number of other important official institutions have been closed down, rendered redundant or shifted from the city in the recent past. The Central Pollution Control Board (CPCB), National Environment Engineering Research Institute (NEERI) and State Bank’s Circle office are some of the few worth a mention. The city has already lost a number of major industrial plants like Duncan’s fertilizer plant, LML scooter factory, Swadeshi house and nine other major textile mills due to inadequate infrastructure and power supply.
The National Textile Corporation (NTC) and British India Corporation (BIC) are another two units which are facing extreme financial crisis and set for closure. The much awaited Tronica City has been left unaccomplished and the proposed four Special Economic Zones (SEZs) have been surrounded with various controversies regarding land acquisition and compensation demands.
However, there are talks of revival of JK cotton and jute mills but for the strike-obsessed workers and minor glitches with KESCO.
The Bureau of Industrial Finance and Reconstruction (BIFR) has prepared a new rehabilitation package for Elgin mills, JK mills and Lal-Imli mills.
“We hope that the mill will start functioning to its full capacity from next year,” says D.S Mishra, GM-Finance for BIC.
“The government has accepted the Rs 498.26 crore BIFR-approved schemes for the NTC mills. Officials have now been directed to prepare the final draft for its execution,” said an industrial development (IDC) department official.
Under the proposals, BIFR has sought closure of nine out of 11 NTC mills while allowing rehabilitation of JK cotton mills and Kanpur textile mill. About 6,000 employees of these sick units have already been paid VRS and wages while others are in queue for the same. Mills which would be closed include Muir Mills, New Victoria Mills, and Atherton Mills of the city.
These closed units are spread in an area of about 200 acres. As per BIFR proposals, an amount of Rs 323.17 crore would be generated through sale of assets which include land and scrap of old machinery to support the package and clear outstanding dues of employees and creditors. In fact, the revival of sick Kanpur mills was urged by Jaiswal, who is the MP from the industrial metropolis.
The economist from Lucknow University, Anand Mohan told Business Standard that the mill managements are squandering the periodic grants from the central government over recurring expenditures, which makes these mills a burden on exchequer and eventually lead to closure. “The prime properties of the mills are being sold out eventually in the name of revival and the units become sick eventually,” he adds.
The government has, meanwhile developed a textile park in Ruma, about 15 kilometers from Kanpur. The Special Economic Zone (SEZ) project operated by Uttar Pradesh State Industrial Development Corporation (UPSIDC) occupies 174 acres of land at a cost of around Rs 26 crore.
The park is proposed to have various facilities like Training Centre, Fashion Design Centre, Tool Room Centre, Quality Control Lab, CETP, for promoting he declining textile units in the region.
“All the basic infrastructure like administrative buildings, roads, drains, police post, etc. has been completed and the work is on to construct other proposed facilities,” said Santosh Kumar, Regional Manager of UPSIDC. About 26 (10% of the total proposed) units have already started functioning, while the rest are expected to begin production by year end.
Although, the success of the project still remains to be seen, the park has given a sigh of relief to the hosiery manufacturers of the city.
“We have much better facilities here as compared to Dadanagar but the procedure should have been simpler,” says Paramjeet Singh, who has shifted to the new site recently.
