Editor's Note: A network of 60 reporters set off across India to test the idea of development as it is experienced on the ground. Their brief: Use your mobile phone to record the impact of 120 key policy decisions on everyday life; what works, what doesn't and why; what can be done better and what should be done differently. Their findings — straight and raw from the ground — will be combined in this series, Elections on the Go, over a course of 100 days.
Ambala: The winds of change uprooted a giant model of a microscope that used to welcome visitors at the gateway of Ambala a few years ago. An iconic landmark that represented the area’s renowned scientific equipment manufacturing industry (removed to make way for development projects), its evanescence has left behind a disturbing parallel.
The industry, which had transformed the economic scenario here, has witnessed stagnation over the past few years. According to the Ambala Scientific Instruments Manufacturers’ Association (ASIMA), there are 3,000 big and small units that make the equipment; the industry’s annual turnover is Rs 1,700 crore, with exports amounting to Rs 500 crore. Industrialists claim that the Haryana government has given minimal facilities and no incentives for the industry’s expansion.
Among the oldest and biggest conglomerates of scientific instrument manufacturing, the units here manufacture a range of products, from microscopes and rheostats to laboratory devices, which are used in experiments on heat, sound, magnetism, plant physiology, biology, and pharmacy in educational institutions and elsewhere. These firms also serve as vendors supplying lenses and prisms to government bodies, namely ISRO and DRDO, and multinational companies, such as Nikon and Zeiss.
Lack of government support, non-subsidised electricity and land, financial constraints, inability to innovate, lack of institutional support for new technology, and credit and marketing mechanism are some of the factors responsible for the industry’s atrophy. “The cost of making a basic microscope was Rs 1,200-1,300 five years ago; it has now escalated to Rs 2,000 due to costly raw material,” says Dheeraj Bahl, owner of a scientific equipment manufacturing unit situated in Ambala cantonment’s industrial estate.
A worker at a manufacturing unit for scientific equipment in Ambala. Chitvan Vinayak/101Reporters
The influx of "the dragon"— cheap Chinese equipment at unmatchable rates — has worsened matters. For example, China exported prisms, mirrors, and other optical elements worth Rs 84,170 lakh in 2017-18, an almost seven-fold increase from the previous year when the imports from China were Rs 13,121 lakh. In 2013-14, India was importing only Rs 8,406 lakh worth of optical products from China. Exports too have dipped. Bahl recalls how the Ambala units that exported heavily to the Gulf countries, among other places, are now confined to fewer countries and inter-state deals.
“The burden of rising raw material costs, staffing, land, and even energy is eating into the already receding margins of cluster firms hit by the Chinese market. It’s only our individual efforts that have kept us afloat in these times; the government hasn’t helped,” he adds.
The Haryana government has been providing subsidies on machinery imported from Germany and Japan. None of them are specifically targeted at this industry, but they nonetheless helped many units set up huge operations. The annual turnover of medium and small-scale enterprises, which used to be Rs 3 crore on an average in 2014, has now increased to approximately Rs 9 crore, because these are now able to increase the volume of production. However, industrialists’ margins are being squeezed. Surinder Sehgal, a manufacturer of stoppers used in the medical industry, says, “Our products are already expensive. Any increase in the selling price carries the risk of losing our market entirely.”
In the last decade, many manufacturers from the area have become traders. “Almost 20 percent of the manufacturers are now into trading due to the high cost of production here,” says Rakesh Gupta, a manufacturer and former president of ASIMA.
In the past few years, a large number of local manufacturers have started importing components from China and assembling them into laboratory instruments. This has helped them to cut costs while maintaining consistency in equipment design. It has also helped the Ambala industry in breaking the monopoly of the big players in the market.
Ambala's story, and that of many other manufacturing hubs across the country, is a scathing indictment of Narendra Modi's famed Make in India campaign that was supposed to build capability and foster innovation across 25 sectors. But from cycles in Ludhiana to sports equipment in Jalandhar, everywhere over the past term, manufacturers are turning traders or assemblers (at least those that could) under the onslaught of cheap Chinese imports. Rahul Gandhi stressed on this in his campaign in Tamil Nadu's Krishnagiri district recently, where he mocked "Make in India", saying the country's market was now flooded with Chinese products.
An industry in atrophy
A major issue that the local manufacturers brought forth was poor co-ordination between government departments and the industrialists. “The government officers who approach us over various issues, be it pollution or tax or something else, come with vested interests and ready to impose heavy fines. No one gives us suggestions on resolving those issues. The government should tell its officials to change their mindsets and help us flourish, not shut down,” adds Gupta.
“Ironically, the implementation of GST brought us relief, because it reduced the number of government officials harassing us.”
Meanwhile, the labourers who are part of this industry are fighting their own battle for survival. The industry is facing a severe shortage of skilled labourers these days. On one hand, manufacturers are demanding the setting up of a common facility that will provide skill development, and on the other hand, the industry pay is not considered on par with the work pressure.
According to ASIMA, the big and small units in Ambala provide employment to nearly 30,000 people. While women carry out the less technical tasks in these units, the men are hired for more technical roles. “No one wants to enter this industry anymore. The workload is extreme and wages are meagre,” says Ajay, a skilled worker whose father, too, was in the same field. These days, workers earn anywhere between Rs 9,000 and Rs 20,000 per month.
Repeated appeals to the state government for support to revive the industry have fallen on deaf ears.
In 2013, the state government had initiated a Rs 100-crore Tool Room Project at Saha near Ambala to help the industry, but it failed to take off. It was meant to “meet enhanced and ever-growing demand for tooling, product and process development as well as skilled manpower”. Basically, it was supposed to provide technological support to MSMEs and train around 10,000 workers every year. With the change in government, the project was shelved. So, there may be some truth in former Ambala MP and Union cabinet minister Kumari Selja’s criticism of the BJP. “Besides their inappropriate policies that led to the failure of the 2013 project, which the previous Congress state government had kick-started, demonetisation and GST were equally hard on the local industry in Haryana,” she says.
In the early 1980s, an instrument design development and facility centre was opened in Ambala, but it was closed down due to poor response from the local industries and alleged government apathy.
“A common facility centre is part of the government policy. If the government provides some assistance, these units can generate more employment. The local industry also has the capability to beat the Chinese industry and capture a bigger market share, both in the country and overseas,” says ASIMA president Jitender Sehgal.
Badish Jindal, former chairman of the National Productivity Council and a Punjab-based industrialist, calls it a policy issue, as there is no scheme for technology upgrade, which is a major issue plaguing this industry. The absence of a central or state government policy to provide skilled labour is glaring, and where there is a policy, there is no incentive for its implementation. Meanwhile, two-time Ambala MP Ratan Singh Kataria says he has already brought the matter before the Prime Minister’s Office and asked Modi to develop Ambala as an industrial hub and set up skill development centres there as well.
Saraswati vs Science
In compelling contrast in Ambala, the past five years have seen a frenzy of spending on projects worth crores for the rediscovery of the mythical Saraswati river, including restoration of various heritage sites along its purported course. The Saraswati river holds cultural importance as Vedic literature was written on its banks. It was in 1999 that Padma Vibhushan Darshan Lal Jain (now 99) started an aggressive movement — Saraswati Nadi Shod Sansthan — to conduct research on the river. With a right-wing government at the Centre and the state, efforts to establish the existence of this river have become somewhat of an obsession. In 2015, the Haryana government constituted the Haryana Saraswati Heritage Development Board (HSHDB) for research on and restoration of the river.
One of the 11 projects under this goal, for example, is the memorandum of understanding signed between HSHDB and the Oil and Natural Gas Corporation (ONGC) under which the latter, which is currently the highest profit making PSU in the country, will develop 100 wells on the flow path of the river, as per the survey conducted by WAPCOS, another public sector enterprise under the aegis of the Union Ministry of Water Resources. HSHDB deputy chairman Prashant Bhardwaj is keen to explain why the river projects are important. “The projects include construction of a Somb Saraswati barrage, Saraswati reservoir, an Adi Badri dam, and other development works in Himachal Pradesh and Haryana’s Yamunanagar district, besides inter-linking of Markanda river with Saraswati. The projects will be beneficial for seven states — Himachal Pradesh, Haryana, Uttarakhand, Uttar Pradesh, Rajasthan, Gujarat, and Punjab. Rejuvenation of Saraswati river is beyond political lines,” he says.
A manufacturer we spoke to, who wished to remain anonymous, said, “We are not against the development of Saraswati river, but our units — which contribute to the economy — should be paid some attention at least.”
(The author is a Chandigarh-based freelance writer and a member of 101Reporters)