M. Soundariya Preetha

‘Industries have to cut dependence on manpower by mechanisation'

COIMBATORE: The Union Government should create a special fund to boost automation in the engineering sector, according to president of the Southern India Engineering Manufacturers' Association Jayakumar Ramdass.

He told The Hindu here recently that during the last five years, demand had grown by about 20 per cent year-on-year, production by 15 to 20 per cent and labour demand by at least 10 per cent.

However, the units were able to meet just five to six per cent of their labour needs.

Five years ago, hardly any unit here had workers from other States.

Now, at least 50 per cent of those in foundries were from other States such as Bihar and Orissa and in other engineering units, it was 10 to 15 per cent.

Wages had gone up by nearly 50 per cent. “We are stuck now as we are unable to address the high labour cost and several units have financial constraints impeding modernisation,” he said.

The interest rate for loans to purchase capital goods was 12.5 per cent to 13.75 per cent.

Assistance under the credit subsidy scheme for capital goods took even a year to reach the units.

Hence, the scheme should be made industry-friendly, the norms simplified and clearance expedited.

Industries had to reduce their dependence on manpower by mechanisation.

The Government should act immediately and help the industries invest in machinery.

“Engineering units should be given incentives to invest in machinery,” he said. This would boost infrastructure and the machine tool industry.

The units would not be able to lock the working capital in machinery.

Hence, the Government should ensure that credit was available at lower interest rates and repayment should be made interest-free for a specific period, he said.