Jalandhar's hand tool industry stagnating, growth rate at 3%

The famous hand tool industry of Jalandhar, which contributes to around 60 per cent of total export of hand tools from the country is loosing turf to China. The causes, a lax approach towards research & development (R&D) and the system of multiple taxation in the country.

"In 1980, India's exports matched China but today our export turnover is just Rs 900 crore as compared to China's Rs 1400 crore," said Sharad Aggarwal, chairman, All India Hand Tool Panel Engineering Export Promotion Council and managing partner of Jalandhar-based Hand Tool unit Forgings & Chemicals Industries

Even the growth rate of the industry, which used to be around 20 per cent per annum has declined to just three per cent this year, he added.

Aggarwal said that Jalandhar faced a locational disadvantage, as raw material was brought to the city from the far-flung eastern areas of the country.

"The state government has agreed to renew the freight neutralisation scheme, but yet not implemented the decision", he said adding that a multitude of taxes plus the absence of a speedy mechanism for refund of the Central Sales Tax (CST) has aggravated the problems of the industry.

He suggested that the government should bring in a uniform goods and services Tax (GST) and the mechanism for the refund of taxes should be made better.

"The industry here needs the Credit Link Capital Subsidy Scheme (CLCSS) launched by the Ministry for Small Scale Industry under which the import of capital goods was subsidised by the government of India", he said. The scheme expired on March 31, 2007 and the industry was hoping for its renewal at the earliest.

Aggarwal said in Taiwan, with government initiatives, an alliance of metal industries was formed. An R& D Centre was also established and top hand tool companies of Taiwan like Cendai and Kuang Yuang apart from other professional companies became members of the alliance.

On Jalandhar's Hand tool's industry, Aggarwal said it shifted from Sialkot during partition. Out of the total export of Rs 900 crore from all over country, Jalandhar's share is about 60 per cent and there are around 350 units in the city which provide employment to about 60,000 skilled and non-skilled workers.