Pune’s leadership position in the auto, auto-ancillary and related electronics domains is under threat for a number of reasons. The industry feels that the abolition of octroi duty will be a major relief to local manufacturers
By Nitasha Chawla
The electronics industry in Pune comprises companies manufacturing consumer electronic goods, communication and broadcasting equipment, strategic electronics, computer peripherals and electronic components. These companies primarily cater to the automobile, automation and consumer electronics sectors. Television sets, white goods, process control instruments, power devices, pumps, transmission equipment, personal computers, etc, are the types of goods manufactured by these companies.
Other products manufactured in the state include programmable logic controllers (PLCs), PLC peripherals, machines, robotics equipment, etc.
Strengths of the city
The emergence of Pune as an industrial hub began in the early 1960s with the arrival of mechanical engineering industries. Pune’s proximity to Mumbai, its good climate and availability of talent made it a destination for large firms like Tata Motors (then called TELCO), Buckau Wolf (Thyssen Krupp now), KSB Pumps, Hindustan Antibiotics, Daimler Benz and Volkswagen. Pune also has hundreds of large and small IT companies. Says Rajesh Kulkarni, managing director, Keetronics (India) Pvt Ltd, “Availability of skilled manpower, good work culture, good educational institutions and high standard of living make Pune a preferred destination for business.”
Pune is also the largest hub in India for German companies. According to the Indo-German Chamber of Commerce, Pune has over 225 German companies.
It is also home to some of India’s important research institutes like the Electronics Test and Development Centre (ETDC), a leading testing and certification laboratory; Automotive Research Association of India (ARAI); Centre for Materials for Electronics Technology (CMET), and several others.
Some persistent problems
However, Pune is plagued by some persistent problems. Shortage of power; bad condition of roads; increase in local taxes and additional expenses like octroi duty, are some of the hurdles faced by industries in Pune.
Another major issue faced by entrepreneurs in Pune is the price of land, which is very high. “Unfortunately, there are not many affordable options for entrepreneurs to set up manufacturing operations in the city,” says Prasad Gurjal, managing partner, Drive Technologies. “The electronics industry will get a boost if we are offered land at economical rates, and more transparent sales tax and other procedures are introduced,” he adds.
The proposal to abolish octroi charges has been pending for quite a long time with the government of Maharashtra, while most other state governments abolished octroi when the value added tax (VAT) was introduced six years ago. However, recently the Maharashtra government has taken a decision to abolish octroi duty and replace it with the local body tax (LBT). Shares Prasad Gurjal, “The government has announced the scrapping of octroi duty; now we want to see how it is implemented.”
Government initiatives
According to Prasad Gurjal, electronics manufacturing is witnessing very negligible growth in the city. However, the Maharashtra government has taken a few steps to boost this sector, which includes a subsidy scheme for MSMEs, wherein entrepreneurs get back 15 per cent of the amount invested in machinery through a bank loan proposal. The loan limit is up to Rs 10 million. Adds Rajesh Kulkarni, “This scheme will motivate entrepreneurs to buy capital equipment and, in turn, increase productivity and improve the quality of their products.”
The city also houses a special economic zone (SEZ) called the Magarpatta City, which is an initiative by the government for development of electronics hardware and software, including information technology enabled services (ITeS). Accenture, Teradata and Vishay Intertechnology are some of the big companies operating in this SEZ.
With Maharashtra announcing its new industrial policy this month, the electronics and IT industry expects some major investments in Pune as well. The policy also promises to develop the Mumbai-Pune-Solapur corridor.
Some electronics firms in Pune
- Acoustics Engineers
- Agate & Agate Marketing
- Resources (I) Pvt Ltd
- Amphenol Interconnect India Pvt Ltd
- Bharat Electronics
- Cermet Resistronics Pvt Ltd
- Cotmac Electronics Pvt Ltd
- Cummins Generator Technologies India Ltd
- DB Power Electronics
- Desai Electronics
- Drive Technologies
- Emmvee Solar Systems Pvt Ltd
- Faber Heatkraft Industries Ltd
- Ferrites India
- Finolex Cables Ltd
- General Industrial Controls Pvt Ltd
- Honeywell Automation
- Jabil Circuits
- Keetronics (India) Pvt Ltd
- Kuebler Automation India Pvt Ltd
- Messung Systems
- Millennium Semiconductors
- Molex India Limited
- Philips Electronics India
- REFUsol GmbH
- Renu Electronics
- Sendap Precision Electronics Pvt Ltd
- Tata AutoComp GY Batteries Ltd
- Vishay Components India Pvt Ltd
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