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Morbi Losing Ground as Clock Manufacturing Hub of India

Biz2Credit Advisor — Fri, 16 Dec 2011 06:56:06 +0000

Town of Morbi known for being foremost wall clock production hub is fast losing this identity. There are a number of factors leading this decline. Delhi, Chennai, Kolkata and Hyderabad are giving tough competition to clock producers of Morbi. Moreover, the government resists to reduce VAT rates and the transportation charges have gone up. All these factors have led to less clock production in Morbi.

Morbi is no longer a favourite destination for wall clock buyers for the negative growth Morbi has been experiencing. The main reasons are increase in Value Added Tax (VAT) and transportation costs. The next door neighbour, ‘Chinese Players’, has also intensified the competition. Now the industry pays 15 % tax out of which 12.5 % is VAT and 2.5 % additional tax.

Clock industry workers have started to migrate to other industries like Ceramics considering bleak outlook. Some Morbi workers have also migrated to Ahmedabad and Rajkot for work. The State Government has been requested to reduce VAT to four percent but no response has been found as yet.

The situation has led to decline of even Ajanta Clocks by 75 percent. The company is now producing 25,000 clocks every day as compared to 1 lakh clocks per day 10 years before. It is true that the market share of Morbi has declined but then it is still leading clock producer in India. A lot can be done if VAT rates are brought down and the manufactures are provided small business loans.

The increase in oil process has led to rise in transportation costs. This resulted in increase in production cost of wall clock manufacturers by 40 percent. Growth of clock industry in other Indian cities has led to Morbi’s business decline by 25-30 percent. Out of the 300 clock units in Morbi five years ago, only 100 to 125 are active.

This article was submitted by Raj Tulshan, Director of Business Development of Biz2Credit. Biz2Credit is a small business marketplace that connects entrepreneurs with financing options and advice to grow their business. Send all questions to info@biz2credit.com

Party manifestos prioritize small business concerns

Biz2Credit Advisor — Mon, 06 Apr 2009 10:22:23 +0000

The challenges facing micro, small and medium enterprises (MSMEs) are being taken up in the party manifesto of the CPI party as a special package planned for protection and development of small scale industries, cottage industries and craft of artisans.

The party is also seeking the deferred recovery of small business loans until the economic slowdown improves.

Indian public sector banks to lend over Rs 13,000 in business loans

Biz2Credit Advisor — Mon, 02 Feb 2009 06:06:18 +0000

Indian public sector banks will lend over Rs 13,000 in small business loans from January to March at rates under 10 percent. The government announced the new initiative as part of the country’s second ‘stimulus package.’

Additionally, the Reserve Bank of India will extend a Rs 7,000 crore line of credit to SIDBI (Small Industries Development Bank of India) before March 31 to provide loans to Indian small businesses. Out of the Rs 7,000 crore, about Rs 6,500 crore will be lent to public sector banks at a rate of 6.5 per cent. The rest of the funds will go to State Finance Corporations.