THE INDUSTRY’S DEMANDS

The State governments must abolish octroi (wherever it is still levied), at least temporarily.

Immediate abolition of the 2% Central Sales Tax (CST) without waiting for two years. It would provide substantial relief immediately and boost demand.  

Bring down steel prices in consonance with international prices.

Increase DEPB benefit to exporters.

Levy duty on the import od auto components.

Reduced interest on working capital requirements and long term loans.

Restructuring of delayed loan payments without penalty.

Association seeks Govt help to save it from closure

Concerned over the likehood that general that several forging units in the region may forced to shut shop in the wake of the global slowdown. The Association of Indian Forging Industry (AIFI) has sought immediate intervention of the government.

In recent move, the Association has written to the ministries of heavy industries, finance and commerce to come up with a viable solution to the crisis. “We are in a real bad state and out repated requests to the authorities have not yielded results. Therefore, we have approached the state and union governments to take action in this regard,” said Asheet Pasricha, Chairman of AIFI’s Finance and Administration Committee and its Pune region spokesperson and Joint MD Trinity Engineers Private Ltd.

The Association members had approached the RBI urging for some financial incentives in November last year. “Despite RBI circulars on issues like re-structuring of loans, banks are yet to take a stand in this regard,” said Pasricha.

As per figures available, there are over 80 forging units in the Pune region comprising of Pune, Nagpur, Kolhapur, Ahmadnagar and Nashik. So far, over 10,000 workers in Pune alon have lost jobs.

“Delay in payments, especially from the original equipment manufacturer (OEMs) and Tier-I customers, have put unberable pressure on the financial condition of the forging companies. Moreover, customers are insisting on price reductions without even consuming the old inventories and steel stocks that result in crippling losses. The forging companies can ill-afford this in these tough times and are forced to shut shop,” added Pasricha.

Amforge Industries in Pune had applied to the state labour commissioner for closing its unit in January. Association members said at least five more units in Pune may be closed next month. Orders from OEMs have fallen by 65% in the past few months.

In the communique sent to the ministry, the Association has outlined three areas on which actions needs to be taken, namely, demand boost, boost in exports and addressing the liquidity crunch.

Published in DNA dated. 19.2.2009.

(Pune Edition)