TN''s automotive, auto components sector registers growth

CHENNAI: “The automotive & auto components industry and the Information Technology industry in Tamil Nadu have witnessed a growth rate of 15-20% during Apr ’06-Sep ’06, against the previous six months (Oct ’05-Mar ’06),” reveals the Bi-annual Economic Survey conducted by the Confederation of Indian Industry (CII), Southern Region.

The export of the Chemical and Fertilizer sector has witnessed an excellent growth rate of 20-25% during this period, which has driven the capacity utilization level by 5-10%.

The CII Survey identified automotive and auto components, IT, textiles, cement, and chemical and fertilizers as the core industrial sectors according to their contributions to the State’s economy.

The automotive and auto components industry in Tamil Nadu is growing rapidly over the last couple of years and particularly, during Apr ’06-Sep 06. The sector has witnessed a growth rate of 15-20% in terms of production during Apr ’06-Sep ’06 against the previous six months (Oct ’05-Mar ’06). Sales have also shot up during this period to over 15-20%.

The sector is looking for a big jump in the next six months. It is expected that the production and sales in the state would increase between 20-25% in the next Oct 06- Mar ’07 period against the previous six months. During the next six months exports are expected to increase between 15-20%, while capacity utilisation is expected increase between 10-15%, and inventory will increase up to 5%.

The industry leaders, however, have expressed their concern over the lack of availability of cheap and skilled manpower. The industry also faces other problems such as inadequate power supply and poor infrastructural facilities.

The CII Survey identified IT as one of the core industrial sectors on the basis of its contributions to the economy of State.

The State continues to be one of the favorable destinations for IT industry in the country. During Apr ’06-Sep ’06 period, IT sector has witnessed a growth rate of 15-20 per cent against the previous six months (Oct ’05-Mar ’06). IT sector’s revenue and overseas billing have zoomed, which has driven the employment scenario of the sector in the state.

It is expected that the revenue would increase between 25-30% during Oct ’06-Mar ’07 period against the previous six months. The demand would increase by 30%, as well as the employment also expected to go up between 15-20%.

The industry has problems in getting skilled man power. It also suffers from infrastructural problems like power cuts. The industry leaders have suggested that a curriculum be framed/modified in tune with the requirement of the industry which would help in getting the required and skilled workforce.

During Apr ’06- Sep ’06, chemical and fertilizer sector in Tamil Nadu has experienced a growth rate of 10-15%, in terms of production and sales against the previous six months period. The export has witnessed an excellent growth rate of 20-25% during this period, which has driven the capacity utilization level by 5-10%.

The production and sales of the sector is expected to rise by 10-15% against the previous six months, while export is expected to increase by 15-20% during this period. The industry leaders opined that the transit time is high because of poor roads. Other problems include higher tax rates like the inter-state tariff tax, octroi, commercial tax, sales tax.

The State’s textile industry, during Apr ’06 - Sep ’06, has witnessed a growth rate of 10-12% against the previous six months in terms of production, while sales also achieved the same growth as production (10-12%) during this period. The sector is expected to increase in terms of production and sales between 20-25% during Oct ’06- Mar ’07 against the previous period, while export growth rate will be the same, which was during the Apr ’06-Sep ’06 (15-20%).

The industry leaders opined that the higher and increasing raw material cost is a matter of concern. The industry also suffers from infrastructural bottlenecks like power cuts, poor quality of roads, water scarcity and poor waste-disposal facilities.

The cement industry has witnessed a growth rate of 5-10% in production as well as sales during Apr ’06- Sep ’06 period against the last six months. The industry would perform better in the next six months as construction activities in India would increase during the winter season. It is expected that the production would grow at 10-12% during Oct ’06- Mar ’07 against the previous six months.

The Industry leaders have expressed concerns over the increase in the raw material/input cost and hence the increased cost of production and the unstable oil price. Industry leaders have suggested a reduction in exercise duty and the restructuring of the tax structure.

© CIOL Bureau