Units shutting down, industrial hub feels pinch of a downturn
Oppn blames CM, Tata Motors Workers Union backs minister’s claim of turnaround
ADITYAPUR (JAMSHEDPUR): Manoj Nayak was wandering around Imli Chowk in Adityapur industrial hub, just seven km from Jamshedpur where hundreds of workers gather every morning and wait to be picked up for daily wage jobs.
“I had to close down my makeshift eatery for labourers working in many companies here about a month ago as there’s hardly any worker left who will come have lunch,” said a dejected Manoj, who was earlier retrenched from a Tata Motors ancillary in Adityapur Industrial Area (AIA).
Manoj, in his early 30s, is not the only man. The declining number of staffers in about 1,200 industrial units in AIA left lanes and bylanes across AIA deserted after the economic slowdown affected Tata Motors’ production.
“The gravity of the situation can be gauged from the fact that over 300 micro, small and medium industries here have been put in the non-performing assets (NPA) list by various banks already. Almost all of about 1,200 companies here are working at 30% of their capacity, resulting in monthly business shortfall to ₹200-300 crore per month from ₹1,000-1200 crore earlier. We hope and request PM Narendra Modi to make some important policy announcements in his rally in Jamshedpur on Tuesday,” said Rupesh Katriar, president Laghu Udyog Bharati.
Worse still, 20 of the 21 secondary steel companies (induction furnace-based units) in Adityapur and Jamshedpur were closed down again from December 1 as the state government’s ₹1.25 per
unit subsidy on ‘exorbitant electricity tariff’ for four months effective from August ended on November 30. “I had closed down my Himadri Steel on October 30 itself... JVNL is charging ₹5.50 per unit, whereas DVC is charging only ₹2.95 per unit and Jusco ₹3.50 per unit. But DVC doesn’t have licence to give power to industries here,” said Mahesh Sonthalia, key member of Jharkhand Induction Furnace Association.
Raja Ram Mahato, owner of Sona Plastics in AIA phase-1, said most affected were the 400-500 auto-ancillary units solely dependent on Tata Motors.
“Over 30, 000 workers have been retrenched here in AIA only due to the economic slowdown during past three-four months... We have only heard rebel BJP candidate Saryu Roy and Congress candidate Dr Gourav Vallabh talking about job loss, closure
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Over 30, 000 workers have been retrenched in AIA only due to the economic slowdown during past three-four months... We have only heard Saryu Roy and Gourav Vallabh talking about job loss, closure on AIA and shifting of Tata Hitachi, closure of Indian Cable... RAJA RAM MAHATO, owner of Sona Plastics in AIA phase-1
on AIA and shifting of Tata Hitachi, closure of Indian Cable and such companies,” said Mahato.
Confederation of All India Traders (CAIT) national secretary Suresh Sonthalia said the biggest fault line is that the state government left most of the companies in AIA solely dependent on Tata Motors and Tata Steel.
Union minister for steel and petroleum Dharmendra Pradhan, however, on Sunday said: “A positive turnaround is around the corner for crucial steel and automobile sectors. Demand and prices in steel sector have shown positive trend in October-November while two-wheeler sales and mid-sector vehicles have also increased. Banks have been asked to pump money into market and ₹2.50 crore have been pumped in lending in October.” Asked about closure of hundreds of companies and resulting job loss in Jamshedpur and Adityapur, Pradhan said job market was also improving now.
Tata Motors Workers Union president Gurmeet Singh Tote also echoed the positive outlook of the minister by saying that monthly production target in Tata Motors has increased to about 6,000 vehicles in December from 3,200 in November when the target was 2,600 vehicles. “On an average, 10,000 vehicles are produced in Tata Motors’ Jamshedpur plant in a month. Things are looking up and we hope production level will touch the monthly average from next month,” said Singh.
Congress candidate from Jamshedpur East Gourav Vallabh squarely blamed the BJP government and CM Raghubar Das for the situation. “Continuous block closures in Tata Motors, closure and job loss in AIA, closure of Tayo, shifting of Tata Hitachi, failure to reopen Indian Cable and closure of Agrico division of Tata Steel — just yards away from CM’s Jamshedpur residence — show how hollow the CM’s claim of development and Achhe Din is. Tata Steel can donate over ₹300 crore to BJP election fund but can’t spend ₹600 crore to revive and reopen Indian Cable,” he said.
Former state minister Saryu Roy said the government’s primary focus should have been on reopening existing industries that have closed down or ailing. “Many companies in Jamshedpur East have closed down or reeling under severe crisis... Scams led to closure of mines. I am fighting against this bad governance and corruption to save Jamshedpur being turned into graveyard of industry,” said Roy.