Dirty politics over Farm Bill issue destroying the manufacturing economy of state

By Badish Jindal

Since 24th September the farmer organizations are on strike in Punjab over the farm bill passed by the Modi Government on 21st September 2020. 

The Punjab government is openly supporting this movement and even tried to counter the farm bill by bringing amendments in the legislative assembly of state. But even then captain government failed to resolve the issue of strike of farmers. 

The farmers have targeted the railway services and fully derailed the passenger and freight services of railways in Punjab.

The AITF have requested so many times to the farmer unions to help the industry by allowing the freight trains in Punjab. 

We have requested them that "It is really shocking that the state which is supporting your movement is facing the heat of your strike. The industry is paralyzed due to the ban on railway services by your organizations. The industry of Punjab was having a very soft corner for your demands in regard to the farm bills but unfortunately now the industry has no sympathy for you as your act of hurdles to the Industry is becoming a reason to closure of this sector. Even we wish to inform you that, the way of your strike is illegal and won’t help in resolving your issues as it is hardly impacting the interest of central government”.  

Unfortunately the state government is busy in taking the undue credit of these strikes and by using this opportunity as a movement against central government, but the state government is unaware of its dire consequences on state’s economy. 

The state government and railway are passing the bug to each other by requesting each other to resolve the issue. The state government is warning the center to resolve the issue for peaceful movement of train transport in state and railway is requesting the state to give the assurance for safety of railways in state. But it is the primarily responsibility of the state to ensure the safety of railways in their respective states. It seems that the state government wants to linger on the issue for their vested interest till the Bihar Elections.  

But the industry is in deep trouble due to closure of freight trains in state. 

Steel manufacturing and consuming industry:
Punjab fully depends upon the railways for its raw material requirements such as steel, scrap or coal. The Punjab every month receives around 120 racks of steel which comes around 3 Lakh tons of steel material. This includes rounds, wire rods, H R Coil, C R Coils, TMT, Billets and Blooms. Beside this Punjab also imports around 2 Lakh tons of imported scrap which comes through railways.

Both these commodities are the back bone of states industry. The steel hplants have started diverting the steel to other states due to closure of railways services. The main steel producers such as Vishakhapatnam Steel Plant have issued the orders to deliver the material in Faridabad by train and from there the consumers will have transport the material at their cost which may put an additional burden of 2000 Rs ton. The railway freight from main steel plants to Punjab is 2000 Rs ton whereas the road freight costs between 3500 to 4000 Rs per ton. Similarly due to the scarcity of imported scrap the domestic steel prices increased more than 2000 Rs per ton since last 15 days. There is a huge scarcity of prime steel and the consumer industries are buying such material in grey market by paying 3000 Rs to 5000 Rs per ton more than its actual cost. 

Exports & Impors :
Thousands of containers are blocked in the ware houses of customs or in industries due to this strike. The exporters are fear of losing their orders and customers due to these circumstances. The exporters are bound to supply the material in specified period as per export order and in case of delay and cancellation of orders the exporters may have to face the huge financial losses. The exporters and importers are fear of the damages charged by the departments and shipping lines on account of these strikes. Their capital is fully blocked as the materials are just on midways due to disruption of railway services.  

Further the exporters are unable to get the fresh orders as they cannot assure the time bound supply of material due to unavailability of raw material and prevailing conditions of railway strikes. 

Many industries in Punjab such as fasterners, machine tools, scaffolding, hand tools, bicycle, agriculture implements, auto parts, agriculture implements, hardware knitwear and garments are in deep trouble due to closure of railway freight services. 

Knitwear & Garment:

Knitwear & Garment is the key sector of states economy which is providing the direct and indirect jobs to more than 5 Lakh workers in state. This sector was badly impacted due to corona and now when the market was improving the closure of railway services has proved havoc for this sector. 

Due to its lightweight the 80% garments and knitwear’s are supplied to domestic and international markets by train parcel and container services. The truck freight costs three times more than the railway freight which is one of the main reason for its transportation by the railway systems. 

This sector was expecting a boom due to festival season and weather information for the winters. But sue to railway strikes the manufacturers are forced to dispatch the domestic shipments through truck for saving the losses. The export consignments are badly stuck in railways and the buyers are diverting towards the China, Bangladesh, Vietnam and Pakistan as an alternate to Ludhiana garment industry. 

These strikes are giving a bad name to the states industry in domestic and international market as the manufacturers failed to supply their materials on time. 

Construction Sector: 
The major component of construction and cement and steel and 70 to 80% of both products are transported through the railways for its freight component. The increased cost of cement and steel is badly impacting the construction industry of Punjab 

AITF has requested all the farmer organizations to save the industries by diverting their venue of strikes. 

AITF have requested to the Chief Minister of Punjab, Commerce Minister of India, Railway Minister of India and Minster of Commerce & Industries of Punjab to come forward to jointly resolve the issue of freight trains. 

We have demanded the waiver of bank interests of affected units and waiver of other damages and charges incurred due to delay by shipping lines of custom departments. We further requested the government to give additional funds through banking to the exporters for continuation of their industries. AITF has requested the government to compensate the road freight charged on the materials supplied by the public sector steel plants.  

(Badish Jindal is National President, All Industries & Trade Forum)