In the last two years, almost 150 have downed shutters at Mandi Gobindgarh, the centre for production of secondary steel. Other industries like textiles too have started to explore options in neighbouring states.
Until a couple of years ago, the narrow lanes of Mandi Gobindgarh, around 60 km from Ludhiana, would be crammed with trucks and its air would smell of metal. Migrant workers, mostly from Bihar and Uttar Pradesh, would sip their tea with dark faces, blackened due to repeated shifts near the furnace. Then the town, also known as loha mandi, was the hub of secondary steel industry in India.
Much of that has changed now. The town wears a deserted look. The lanes are empty and the factories are closed. The air smells cleaner. There are few workers on the streets; most have left Mandi Gobindgarh in search of jobs.
The situation is not much different across Punjab. Industry seems to have run out of steam. Fresh investments have turned into a trickle. Joblessness amongst skilled workers is on the rise.
A combination of factors has led to this state of affairs: the global commodity meltdown, industrial slowdown in the country, tax policies, and high cost of doing business. As the tables illustrate, the share of manufacturing has declined in Punjab, and since 2011-12, the rate of growth of this sector has reduced significantly.
With stagnation in agriculture, this has caused Punjab to lag behind others in the march to development. Once the state with one of the highest per-capita incomes, it now stands tenth on the list. Its neighbour, Haryana, has a per-capita income 45 per cent more than Punjab's.
It's no surprise that resentment against the Shiromani Akali Dal-led government is running high across Punjab. Even its most optimist supporters give the party an outside chance of winning the election to the state legislative assembly next year.
The quiet factories of Mandi Gobindgarh reflect the somber mood across Punjab. "In the last two years, about a third of the 400 or so industrial units have shut down. At present, there are around 250 industrial units which are working," says Vinod Vashisht, president of the All India Steel Rerollers Association.
Starting from the 1940s, the industrial units here had earned a name for themselves as a reliable source of secondary steel. Majority of the units here are electric furnaces which produce ingot from metal-scrap (mostly imported) which in turn is used by the steel rolling mills.
Source: Business Standard