GST throws Telangana’s ceramic industry into crisis

The industry created nearly 10,000 jobs, direct and indirect. However, Mancherial district now has 19 units, according to the District Industries Department.

By Author   |   Published: 14th Nov 2017   11:46 pm Updated: 14th Nov 2017   11:47 pm
GST
Ganesh Ceramics at Gadderagadi village in Mandamarri mandal, on the outskirts of Mancherial.

Mancherial/Kumram Bheem Asifabad: The ceramics industry, which once thrived in the district, is reeling under crisis, following the imposition of Goods and Service Tax (GST) and a growing usage of polyvinyl chloride (PVC) pipes. Over five units were shut down this fiscal alone, indicating the bleak scenario. With many units on the verge of closure, livelihood of thousands of labourers is at stake.

Rebbena in Kumram Bheem Asifabad district and Thandur and Mancherial in Mancherial district used to house 29 ceramic manufacturing units five years back, thanks to abundant reserves of coal, raw material and clay. Products were being exported to several parts of not only Telangana, but also the neighbouring States of Maharashtra, Karnataka and Tamil Nadu. Mancherial district is considered a hub of ceramic manufacturers with the most number of units in the country.

The industry created nearly 10,000 jobs, direct and indirect. However, Mancherial district now has 19 units, according to the District Industries Department. This suggests that 10 units were shut down mainly owing to operational losses in the past four years and half of them had slipped into the red in the ongoing financial year. The crisis can be attributed to the increase in tax rate and customers’ inclination towards PVC pipes.

GST

“The ceramic industry is undergoing a slump ever since the GST was raised from 5 per cent to 18 per cent on stoneware glazed (SWG) pipes in financial year 2016-17. Monthly tax was raised from Rs 1 lakh to Rs 4 lakh on each unit, resulting in financial burden on the managements. Similarly, shift in demand from these pipes to PVC pipes has left a catastrophic impact on the sector. We are unable to make profits and are incurring huge losses,” P Varasad Rao, State president of Telangana SWG Pipes Manufacturers’ Association told Telangana Today.

P Hanumanth Rao, owner of Ganesh Ceramics in Mancherial, said that the managements would either be forced to sell their units to real estate firms or to convert them into functional halls, if they continue to pay such taxes. This will certainly affect the livelihood of thousands of workers from the district as well as from Madhya Pradesh and Uttar Pradesh.

The manufacturers sought the government to save the industry by using ceramic pipes for drainage system in urban parts of the State and in constructing homes under the housing scheme. “The pipes are eco-friendly, long-lasting and affordable. They are better than PVC pipes for carrying sewage,” Varaprasad Rao said.