Sendhwa cotton mills going to seed

Once known as the biggest mandi in Asia, the Sendhwa mandi is dying a slow death. The MP government has rejected ginning and pressing millers' demand to cut mandi tax.

It was reported in this newspaper that high mandi tax rates had forced Sendhwa cotton mills to migrate to Maharashtra, where mandi tax rates are as low as 50 paise per 100 kg as against Rs 2 per 100 kg in Madhya Pradesh.

Agriculture Principal Secretary Pravesh Sharma, told Business Standard there would be some respite to the millers. But a letter (a copy of which is with this paper) issued recently by the Mandi Board to the Sendhwa Cotton Association recently said that a cut in mandi tax would have an adverse affect on mandi income, which may go down by 50 per cent.

The letter says: "A tax cut of 1 per cent would not be in the interests of the mandi committees and development activities."

The state government uses the mandi fund to construct roads and other activities, which are strictly not in favour of mandis or mandi commodities. More importantly it is also important for mandis to survive if the commodity is not consumed they will perish. "The farmers have already started selling cotton at neighbouring Maharashtra mandis and arrival in Sendhwa mandi was very low this year," said a miller.

The cotton arrival went down by 70 per cent in Sendhwa mandi due to poor consumption. "The mandi arrival has dwindled to 30 per cent of what it was a year ago," said a Sendhwa mandi source. The Mandi data reveals that Sendhwa mandi reported arrival of 5,297 tonne of cotton during last year, which dwindled by 61 per cent to 2,066.40 tonne this year.

Meanwhile, three more mills have shut their shops in Madhya Pradesh. "We will again raise this issue before the state chief minister," said Gopal Tayal secretary of the association. The units, with a combined turnover of Rs 800-1000 crore approximately, started taking shape during 40s and reached a big number of 110 till 1998.

Now only 24 millers have left will soon be closed down. It is not only mandi tax but low availability of power, law and order problems, higher power tariff, non-availability of cotton and callous neglect from government machinery are few reasons for migration of mills.

The cotton millers have either closed their units or have set up shops in Chalisgaon, Jalgaon and Aurangabad since Maharashtra levies only 0.50 per cent.