The Association of Indian Forging Industry (AIFI) today sought immediate intervention of the Union and state governments against imminent closure in face of the global economic downturn.

Chairman Northern Region, AIFI, Ranbir Singh told a media conference that many forging were working at less that 30% capacity utilization while others faced closure. “Already many units have downed shutters totally or partially,” he said.

Global demand and orders are down by nearly 50%. Leading to a mass scale layoffs. “Nearly 25000 jobs have been shredded by the engineering industry in Punjab alone. Which accounts for up to 35% of engineering export.” Revealed Sukhdev Raj, an industrialist.

“Most plants in the organized sector are working barely 2-3 days a week and raw material inventory (steel), purchased at exorbitant prices to meet the exports schedules already committed, is piling up,” he rued.   

Ranbir Singh said the present government policies are being viewed as detrimental to the interest of engineering goods manufacturers in general and forging industry in particular and could be made more proactive and conducive for revival and growth of the sector.

“The government and RBI should initiate both fiscal and monetary measures to bring the economy out of recession. Bailouts, as are being handed out in the US, may be a last resort,” he added. The major demands of the AIFI include 100% exception on export profit. Stable steel and dollar prices, special relief package for engineering sector, 50% discount on freight rates for exporters and interest free or subsidies loans. 

“The state government should also do its bit for the industry on the verge of collapse. It could simplify the VAT refund procedure, exempt export goods from all check barriers and toll charges.” Advised Ashwani Kohil.      

Published in Hindustan Times dt. 13.12.2008.