Date:26/05/2008 URL: http://www.thehindu.com/2008/05/26/stories/2008052658270300.htm

Kerala - Kochi

Manpower shortage hits engineering workshops

Staff Reporter

Many units close down because of high tax rate

Tax rate in Kerala is 12.5 per cent
Only 15 per cent of installed capacity is being utilised

KOCHI: Industrial engineering workshops are facing a stiff shortage in manpower at a time when the construction sector is booming in the State. The engineering units that make scaffoldings, grills, grates, piling equipment, garden furniture, shutters and props are also burdened with a tax structure that has forced big buyers to opt for supplies from outside the State.

Many cast iron units in the State have closed down due to high tax rate.

Currently the tax rate in Kerala is 12.5 per cent while it is just 4 per cent in Tamil Nadu.

The tax rate in the neighbouring state is set to come down further. K.T. Jose, Chairman, Engineering Cluster Coordination, says a major industrial unit in Kerala has already started buying spares from Tamil Nadu.

“At the same time, a Public Sector Undertaking in Kochi placed orders with suppliers based in Kerala because the tax rate is four per cent for this particular unit,” said Mr. Jose.

In the recent past, builders have started supplying raw materials to work site to get their work done. This has led to a loss of revenue for the government.

“The large-scale immigration of workers to Gulf countries has also affected the engineering workshops,” says Mr. Jose.

The Cluster members want the government to fix a minimum salary level at which the workers may be allowed to migrate to Gulf countries.

According to Cluster members, only about 20 per cent of the total demand for engineering work in Ernakulam district is met from the district.

The condition of these engineering workshops is worse as only 15 per cent of the installed capacity is being utilised.

The Ernakulam Engineering Cluster has called for initiatives at the panchayat level to save the industry. Considering that engineering workshops employ 4-40 people a unit, the sector is a major employment provider. Currently, there are 1,800 engineering workshops in the district, of which 1,300 are members of the Kerala Industrial Engineering Workshops’ Federation.