Due to market slowdown industries in and around Jamshedpur– particularly in AIA housing auto ancillaries – are facing tough time with series of block closures in Tata Motors from past month. So much so that about 30 steel sector companies were on the verge of closing down while about a dozen downed their shutters from Thursday.
Hit with recession in the automobile sector, Tata Motors has gone for block closure for the fourth time since last month – this time from Thursday to Saturday, besides Sunday being a holiday. The company has also opted for separation of 12 days (asked to sit in house) for over 1000 Y-6 (temporary) workers. Permanent employees will rejoin duty on August 5 whereas Y-6 workers have been asked to rejoin on August 12.
Tata Motors had to take series of block closures due to sluggish market demands. There was production for only 15 days per month for the last two months. Union sources said the company has orders for only a week’s production in August. This has resulted in limited work in about 1000 auto-ancillaries dependent on Tata Motors in Adityapur Industrial Area (AIA).
On the other hand, the ‘exorbitant’ power tariff hike has hit the steel sectors with induction furnaces – where electricity is an essential raw material – resulting in the closure of about 30 companies. In fact, over a dozen such companies have started downing shutters from Thursday.
Inder Agrawal, president, Aditaypur Small Industries Association (ASIA) confirmed that 25-30 steel sector companies have downed their shutters after state government exorbitantly hiked power tariff by 38% with effect from April this year. Due to this the production cost has increased drastically which has left them with no other options than to shut down.
The JBVNL – supplier to most companies in Kolhan – tariff of Rs 5.50 per unit is the highest when compared to cheap rate of Damodar Valley Corporation (DVC) and Jamshedpur Utility and Services Company (Jusco), the two other power suppliers.
DVC supplies power to steel sector industries in Giridih, Ramgarh, Patratu, Deogarh and Ranchi. As a result, the companies are producing ingots at much cheaper rate. However, Jamshedpur and Adityapur-based industries bear the brunt of high JBVNL tariff of Rs 5.50 per unit. Agarwal also added that the government should withdraw the tariff hike immediately and also strictly implement scrapping of 15-year-old vehicles to boost both the sectors.
Laghu Udyog Bharti (LUB) president Rupesh Katiyar said about 1000 companies in Jamshedpur, Adityapur and Dhalbhumgarh were affected with the recession and power tariff hike, rendering over 30, 000 direct and indirect workers jobless.
Source: Hindustan Times