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Dying steel industry of Mandi Gobindgarh
Rohini Verma | 01 Nov 2015

Mandi Gobindgarh was once called steel capital of India and Punjab. But now the whole industry is facing a severe fall. Mandi Gobindgarh is 55 km from Ludhiana.

Mandi Gobindgarh was once called steel capital of India and Punjab. But now the whole industry is facing a severe fall. Mandi Gobindgarh is 55 km from Ludhiana. The 500 rolling mills, induction furnaces and foundries produce ingots, construction steel, and specialised high carbon steel.

More than a third of the units in the town have shut down. Many have vanished and many have been taken over by banks to recover their loans. Many others are on the verge of closure due to lack of demand and due to loans which they are unable to repay. There are many problems like high power rates, lack of tax benefits, lack of uninterrupted power supply, etc. In Punjab, nearly 50 per cent of the secondary steel makers, who produce steel through the induction route, have shut their units. Many factory owners have put their products like furnaces for sale. But they are unable to find buyers.

Another very significant reason is launch of the Mahatma Gandhi National Rural Employment Guarantee Scheme. This scheme has led to labour shortage. Due to this scheme most of the labour is shifting back to their native villages as they can get employment there.

What has crippled the industry is:

-         Repeated increase in sales tax on petroleum products.

-         Withholding of permission by the Pollution Control Board to allow use of ''pulverised'' coal in the furnaces, instead of furnace oil.

-         Financial crunch and market speculation.

-         A high freight rates and tax incidence on raw materials.

-         Another cause of the major setback to the iron and steel industry is the packages of incentives that the Centre has announced for Himachal Pradesh, J & K, Uttaranchal etc. All units coming up in these states will, henceforth, for 10 years, enjoy a complete tax holiday, including exemption from paying income tax.

The state government has totally turned its blind eye to the situation. The government needs to intervene before its too late. But will Badals give a thought to this once a very prosperous town? This is the million dollars question which only time will answer.