The Hindu Business Line : Industries' associations want rollback of marking fee hike

Justifying facts
The cement industry, which manufactured more than 40 grades of cement, is covered by a single licence.
But the pump industry is saddled with seven different product licences for the same application with `multi-fold minimum marking fee', causing substantial financial burden.

Coimbatore , June 21

The decision of the Bureau of Indian Standards (BIS) to increase the marking fee with effect from July has drawn flak from the industries' associations in Coimbatore, which are seeking a rollback of the proposed hike.

The associations have sought the intervention of the Union Minister for Agriculture and Consumer Affairs, Mr Sharad Pawar, to constitute a committee to examine the practical difficulties involved and arrive at a solution acceptable to all.

In a representation to the minister, they said that BIS had recently issued a circular announcing the increase in minimum marking fee by 40 per cent to 60 per cent and the per unit rate by 20 per cent, and threateningcancellation of licences for non-compliance.

They said that no quality-conscious industry would like to lose the quality certification and expressed the fear that the threat of licence cancellation would demoralise the industry.

Financial burden

It was pointed out that in the nearby hosiery town of Tirupur, the number of licence holders had dropped from 140 to 13 because of the increase in the marking fee.

In 2003 BIS had increased the minimum-marking fee by 60-100 per cent and per unit rate by 20 per cent. The associations pointed out that while the cement industry, which manufactured more than 40 grades of cement, was covered by a single licence, the pump industry was saddled with seven different product licences for the same application with `multi-fold minimum marking fee', causing substantial financial burden.

In terms of the value of the final product there were differences between the pump industry and others, but the former had to pay a far higher fee.

While the minimum unit rate-marking fee was Rs 3 for steel rods priced Rs 35,000 a tonne, for a jet pump priced Rs 3,300, the fee was Rs 8.70 per unit.

Similarly, for cement the rate was Rs 2 per tonne (product value Rs 4,500) and for electrical cable, the rate was Rs 0.44/100m (Rs 0.44 for a product value of Rs 3,000). But for mini monoblock pump, it was Rs 2.88 per piece (of value Rs 1,300).

Referring to the increase in charges, they said for a monoblock submersible pump the marking fee rate had risen 133 per cent in the past five years — from Rs 12,000 in 2001 to Rs 20,000 in 2002, and Rs 28,000 in 2006.

They pointed out that nearly 90 per cent of the BIS licences were obtained by SSI units. It was learnt that from April 2007, there would be 5 per cent annual increase in the minimum marking fee and the per unit rate.

Tiny sector

They requested Mr Pawar to withdraw the licence fee hike announced by BIS and evolve a separate licence fee structure for the tiny sector to help attract more industries into the BIS fold. The fee for tiny industries should not exceed 50 per cent of the existing fee.

More Stories on : Standards & Benchmarks | Tamil Nadu | Industry Associations

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