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Thane industrial belt faces a bleak future

Renni Abraham in Mumbai

It's an industrial belt that's dying. Once a robust locality that housed the factories of multinational companies and hordes of small manufacturing businesses, today it has dozens of closed engineering, chemical, textile, dying or water service, paper, food processing plants.

According to official figures, Thane district has 6, 365 industrial units. Of these, 2,045 are housed in the Thane-Belapur industrial belt.

A mere 326 units have declared themselves sick. But listen to S L Patil, secretary general of the Thane-Belarpur Industrial Association: "For the last four years another 500 industrial units in the Thane-Balarpur industrial belt have been closed without declaring themselves sick in order to avoid scrutiny by the financial institutions that financed them," he says.

In the early 1990s, this industrial belt boomed. The Maharashtra State Electricity Board supplied in excess of 200 MW of power to service the requirements of the small, medium and large industrial units in belt.

But the five 200 mw (collectively) sub-stations set up by MSEB at Mahape, Kalva, Nerul, Vashi and the Nocil plant had to scale down operations from 1996 when the decline began - the belt now consumes only 118 mw of power.

Businessmen and others cite several reasons for the belt's decline. First of all, multiple taxes pushed up costs. "Consider this. The Maharashtra Industrial Development Corporation realised Rs 18.5 crore from the belt in 1996. In 2002, although business is nowhere close to booming, Rs 73.5 crore (Rs 735 million) was paid to MIDC. Then there is the 13 per cent sales tax which is in sharp variance from sales tax in Gujarat.

"When you add up the sales tax and the electricity and water charges along with labour costs, the belt's decline can never be in any doubt," says Patil.

Secondly, they cite the total lack of support services by the local civic administration, despite Rs 100 crore (Rs 1 billion) being paid annually to the Navi Mumbai Municipal Corporation. Says Patil: "The belt was promoted as the petro-chemical belt. Yet emphasis was placed on the creation of residential townships. This, compounded with the lackadaisical attitude of the NMMC, has contributed to the decline of the Thane-Belapur belt. Today even the garbage cleaning in the belt is carried by the resident industrial units that pay for this through their own pockets, notwithstanding the Rs 100 crore collected by NMMC each year as property tax and other charges."

Patil claims that labour costs shot up after multinationals set up units there in the 1970s and 1980s. He also cites the example of Nocil, which took seven years to obtain environmental clearances. Nocil's closure lead to the closure of over 150 ancillary units, he says.

But P N Samant, president of the Kamgar Agahadi, the Datta Samant trade union that dominated the belt, demurs. He says it's true and many big companies in the belt shut, but argues that they did so for different reasons, ranging from foraying into different businesses and the recession.

Says Samant: "It's not that inherent problems exist in the belt itself." Even as that debate rages, the Maharashtra government has decided to convert 80 such industrial estates in the state into self regulating townships.

Says MIDC chief Aziz Khan: "While the draft notification has been issued in respect of the 14 industrial estates, another proposal for converting a further 66 industrial belts, including the Thane-Belapur belt, into a self regulating township is under the state government's consideration." This means that businessmen in the Thane-Belarpur belt can run the place themselves.

That will save businessmen in the area Rs 100 crore a year.

Says Patil: "In any case we are already self regulating the Thane-Belapur belt ourselves at our own cost. We are already running an affluent treatment plant, a 35 kilometer long drainage system, fire and emergency services in the belt by ourselves." But will the belt be resuscitated? That's now in the hands of the local businessmen.

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