Gujarat may lose out on investment front

Gujarat, once recognised as a haven for industrial growth may find itself losing favour with the leading industrial houses in the country. As per the statistics published by the National Informatics Centre, the state has slid down to the second position in terms of industrial investment with Maharashtra occupying the top slot.

According to the available figures till April this year, Gujarat with 5,015 Industrial Entrepreneur Memorandum involving a proposed investment of Rs 1.48 crores. In terms of proposed employment too Maharashtra scored with 15.78 percent as against Gujarat’s 7.86 per cent.

Low rates of power and peaceful industrial relations have been the hallmark of industrial atmosphere in the state and a business friendly environment packed with incentives ranging from sales tax benefit to the number one slot in industrial investment. Unfortunately, over the years labour unrest has raised its ugly head time and again.

Coupled with this industry observers say the high cost of electricity is another dampener. Super high tension power, which was available to the industry at Rs 2.30 per unit till as late as December 1991 is currently being charged at Rs 5.56 per unit, the second highest in the country.

But more than that labour unrest, a rarity in the state, has become a regular feature over the last two years. A number of fronts ranking industrial houses have been beset with labour unrest resulting in substantial loss of mandays and consequential loss to the state and central exchequers. The mandays lost increased from 10,18,759 in 1977 to 12,12,614 in 1988. Modern Petrofils was recently constrained to terminate the services of 24 workers after a long winding industrial relations problem.

Novino Batteries, with 25 years of existence and employing 1,300 employees has also been besotted with labour unrest over differences on long term settlement for quite some time now. The strike by trade union Ashwin Vanaspati based at Samalaya was declared illegal by the state government. However, the slow down still continues though the strike has been called off.

Dinesh Woollens at Ankleshwar recently remained closed for two months, again due to the labour unrest. Apollo tyres, India’s largest truck and bus tyre company, resorted to lockout at its Limda unit in Baroda district following illegal strike and disruptive activities by the employees. The unit employs more than 3,000 personnel.

Besides affecting the industrial production, the unrest problem has also led to heavy losses in terms of generation of state revenues. For instance, the financial loss suffered by Apollo Tyres and the government in current financial year beginning April I, 1999 till May 27, 1999 on account of illegal strike and go-slow tactics is Rs 73 crores, which includes production loss of Rs 55 crores and loss of excise and taxes to the central and state exchequer of Rs 18 crores.

Compiled from local news media