THE stainless steel utensil makers in Maharashtra, who contribute to almost 70% of the country's total production, are steadily shifting production out of the state due to steep power and octroi rates.
Almost a third of the small scale units that make utensils for kitchen use have decided to shut their plants in Maharashtra and shift to neighbouring states like Gujarat and Rajasthan to avail of better facilities, said a senior industry executive.
There are over 5,000 such steelmaking units in Mira Road and Bhayandar and an additional 3,000 units in Vasai, Goregaon and Mulund that make utensils and other products.
Bhayandar Stainless Steel Manufacturer and Traders Association president Hiten Gada told ET: “The Mira-Bhayandar Municipal Corporation earns nearly 60% of its revenue from this (stainless steel) industry but they are not willing to give us any incentive. This industry has a revenue totalling about Rs 1,440 crore annually. Nearly all states in India have dismissed octroi tax but in Maharastra all industries are subjected to that,” he said, adding that this was the main reason for the units to shift production.
Since the units are in the unorganized sector, it is difficult to get the exact number.But it is learnt that about 30% units have closed down here and have started manufacturing at Ahmedabad and Sarigam in Gujarat and to Jodhpur in Rajasthan. Since majority of the unit owners belong to the Gujarati, Marwari and Kutchi communities, they also prefer moving to their respective states.
The industry employs over 25,000 people. “If the state government doesn't abolish octroi tax, then all these units will go to Gujarat and Rajasthan as there is no octroi tax and infrastructure such as electricity, water and land for production is better and cheaper compared to Mumbai,” said Subhas Shah, a key member of the association.
He further added that since small units rely on bigger companies for metal scrap, the small-scale units are forced to follow the larger ones, majority of which have already been shifted to Gujarat.
Another manufacturer, on condition of anonymity, said since India is a major exporter of utensils to South Africa, America and to the Middle East, moving production to Gujarat has its benefits as the state has manufacturing and export SEZs such as like Mundra and Kandla.