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Shutting shop in Kota

Tina Edwin | Updated on September 28, 2019 Published on September 27, 2019

Once upon a town: Kota was once a prosperous industrial town, earning itself the moniker ‘Kanpur of Rajasthan’   -  Image courtesy: Jan Nayak Newspaper, Kota

Outsiders today recognise Kota as a coaching powerhouse that annually prepares thousands of students for competitive exams. But this Rajasthan town sees itself mainly as a manufacturing hub going through a downturn. As tuition classes and student hostels eat into its once thriving factory spaces, Kota desperately looks for ways to revive its industrial chops

The sprawling area was earmarked for Kota’s legion of workers. Today it is swamped by students. There is little to indicate that the Indraprastha Industrial Area (IPIA), situated about 15km from the city railway station, is Kota district’s largest industrial park. Teenagers lugging backpacks and in uniform far outnumber factory workers.

Set up on the arterial Jhalawar Road in the early ’70s by the Rajasthan State Industrial Development and Investment Corporation (RIICO), this was meant to be a hub for small and medium manufacturing enterprises. The sorry state of the industrial units making various kinds of machinery, electrical parts, chemicals, solvents and pigments tells a different story.

Thousands of students live and study in this area, as their coaching institutes and hostels rub shoulders with units producing metallic stearates, welding electrodes and plastic products, besides those that cut and polish the famed Kota stone. Roads 1 to 4 are spilling over with tutorial schools. Many of the popular ones such as Resonance Eduventures, Vibrant Academy, Career Point and the pioneers of coaching in Kota, Bansal Classes, have their registered office and main campuses in the industrial area. Allen, which has emerged as the Big Daddy of coaching, has its registered office in a largely residential locality across the road.

In fact, as one drives towards Indraprastha Industrial Area, or IPIA, it is the imposing building of Resonance Eduventures that serves as a landmark. The individual plots in IPIA are relatively large, so many entrepreneurs have been using a vacant section of their plot to run hostels for students. Many locals point out that it is easier to make money running a hostel for students than from an industrial unit.

It was a little over 20 years ago that Kota emerged as a coaching hub, though VK Bansal’s tuition classes had started in 1984.

Class in session: It was a little over 20 years ago that Kota emerged as a coaching hub   -  REUTERS/AHMAD MASOOD

 

It is estimated that about two lakh students come to Kota every year — mainly from north India — to be coached for competitive entrance examinations for top engineering colleges and medical schools. Despite an oversupply of rooms at present, the hostel business is a lucrative one. Some estimate returns on investment of 8-9 per cent, down from the 10-12 per cent three years ago.

There is good money to be made from the outright sale of plots too. While the prevailing official rate is ₹3,000 per sq metre, the market value is estimated to be ₹30,000 per sq metre. The original allotments over four decades ago came at far cheaper rates. The demand for rental property remains high in the town even as the property market elsewhere in India has been facing a downturn. Nevertheless, there are worries that apartment prices and rental values in Kota might plateau before long.

Birth of an industrial town

Kota was once a prosperous industrial town, earning itself the moniker ‘Kanpur of Rajasthan’ in a nod to Uttar Pradesh’s famous industrial hub. Several industrial groups had set up large manufacturing plants in and around Kota town from the ’60s. Some of these have ceased operations.

Kamaldeep Singh, president of Small Scale Industries Association, Kota   -  TINA EDWIN

 

“The closure of these industries was mostly due to the changing dynamics and developments specific to a company rather than the culture of Kota,” says Kamaldeep Singh, president of the Small-Scale Industries Association of Kota and the owner of Mann Electronics, manufacturing electromechanical and other components for telecommunication, electronics and electrical products.

Shriram Fertilisers and Chemicals and Shriram Cement Works of the DCM Shriram group and Shriram Rayons of DCM Shriram Industries, Chambal Fertilisers and Chemicals of the KK Birla group, and Mangalam Cement of the BK Birla group are some of the large industrial units that continue to operate in Kota. The town, however, suffered a big jolt when JK Synthetics declared a lockout in September 1997.

With seven manufacturing units, JK Synthetics was Kota’s largest enterprise, boasting over 4,000 permanent and over 1,000 temporary workers. The company’s Kota plant was the first in the country to manufacture acrylic fibre; its other plants were manufacturing polyester filament yarn and industrial nylon. A dispute among the owners, the Singhanias, proved disastrous for the Kota units. Troubles caused by some trade union leaders are also said to be a strong factor in declaring the lockout.

Over the years, other companies, too, shut their local units. Samtel Colour ceased operations at its Kota unit in November 2012, edged out by uncompetitive imports. Its two plants in Kota were manufacturing picture tubes for television, and colour electron guns and other items for a range of screens including TVs and computer monitors, but consumer preference for imported liquid crystal display (LCD) and light emitting diode (LED) screens proved to be the company’s undoing. Samtel and its associate company Samcor Glass were major producers of picture tubes at one time.

Public sector enterprise Instrumentation India wound up in Kota in 2016 after it ran up huge losses amid intense competition from the private sector. The Kota plant had been manufacturing control system equipment for telecommunications, railway signalling and defence among other products. The building still stands, though the premises are overrun by wild growth. Its erstwhile housing colony for workers, on the other side of Jhalawar Road, is now taken over by coaching institutes, tall apartment blocks, hostels and an upmarket hotel.

Factories belonging to Oriental Power Cables, Sudarshan Textiles and a few others had shut shop in the mid-’80s, and their assets were bought over by others.

Local businessmen say that many small units shut down and moved into businesses aligned with the coaching industry, as they were hurt by several changes to industrial and tax policies over the years. The Union government’s decision to shrink the list of items reserved for manufacture by small-scale units had adversely affected them, they say. From about 1,000, the list had been pruned to just about 50 items since 1997.

LC Baheti, president of the Laghu Udyog Council of Kota   -  TINA EDWIN

 

LC Baheti, president of the Laghu Udyog Council of Kota, who runs manufacturing units in the Chambal Industrial Area in another part of Kota, says small units also suffered as they could not cope with the rise in the cost of raw material, transportation, energy and wages.

Many workers and employees rendered redundant by the closure of units took to other activities to earn a livelihood. Some people took to driving autorickshaws while others set up small hostels and eateries for the students flocking to Kota, say RK Swamy who has been a trade union leader and an office bearer of the Rajasthan unit of the Communist Party of India (Marxist).

Yet, it would not be accurate to say that the industrial base of Kota has completely weakened. While no major industrial group has invested in the district since the early 1990s, with KK Birla group’s Chambal Fertilisers being the last, some Kota-based businesses have expanded over the years. MultiMetals Ltd, which manufactures copper and copper alloy products, and Goyal Group of Industries, a major processor of soya beans, are among them. Yet, this hasn’t been nearly enough to restore Kota’s days of glory as a strong industrial town.

Birthing an investment destination

Kota’s emergence as a strong industrial base was as recent as the ’60s. Until then it was better known for its grain market. It had several rice mills and briquette units. Quarrying of limestones and sandstones was another activity. Then there were the weavers who produced the famous Kota Doria saris.

The region’s transformation into an industrial centre in the late ’60s is widely credited to the then chief minister Mohan Lal Sukhadia and his industry minister, Rikhab Chand Dhariwal. Local businessmen often recount how Dhariwal, who had roots in Kota, made train journeys to Delhi to call on industrialists to invest in his town. Sukhadia and Dhariwal saw the district’s potential since it was a major junction on the Delhi-Mumbai rail link. The town had developed on the banks of Chambal, a perennial river, so water was not a problem either. Neither was electricity, with five power plants in and around the region. Land was plentiful and fertile.

The industrialists were offered land for a token sum of money and power was charged at three paisa a unit. The efforts paid off.

“But now no one makes that kind of effort to attract investment,” a local businessman laments. Land costs have zoomed, leaving most new ventures financially unviable. “There is no policy in place to encourage young entrepreneurs or even start-up ventures,” Baheti says.

Those who venture into that space are self-driven. Ashish Raj is one such entrepreneur. His family runs Agnee Transmission, an enterprise that makes gearboxes and gear motors, in IPIA. But he has started a business, Agnee Innovators Garage, where he works with a small team of students from various institutes around Kota to develop 3D printers, robots and CNC mill routers. “I am trying to build linkages between industry and students — almost like nurturing budding entrepreneurs.” The 3D printers are sold among others to educational institutions.

Some believe that since IPIA and other industrial areas developed by RIICO are prime land now, it makes little financial sense to set up new units in these areas. “The government needs to identify and develop new clusters to help businesses grow,” says Singh. He adds that any newly formed industrial area should be close to the city to encourage Kota residents to set up enterprises. That will require the district administration and the state government to work in tandem to identify such land. One suggestion from the industry is to start with land that has been encroached upon.

The decline of traditional activities

Kota’s traditional industries, too, are facing difficult times. The demand for Kota stones — the greenish-grey limestones and sandstones popularly used for flooring, roofing and other similar needs — has fallen. Consumers opt for cheaper ceramic tiles that come in different styles and colours and are easy to maintain for flooring and the more popular reinforced cement concrete (RCC) for roofing. Even institutional users such as the railways and public works departments no longer favour the majestic Kota stones.

Hadoti Kota Stone Industries Association president RN Garg says the industry has been struggling with falling income over the past few years. “Stone processors have been unable to increase the price of stones but their costs have been climbing,” he says. The association has about 290 members, down from 425 in its heyday.

Business as usual: RN Garg, president of Hadoti Kota Stone Industries Association, at his stone processing unit   -  TINA EDWIN

 

The exporters are better off. The demand from European markets for sandstones, mostly of dull colours such as grey, has been climbing, says BL Gupta, director, Seaward Exports. The sandstones can withstand the extreme cold conditions in Europe, he explains. The pinkish-red sandstones have a market in India.

As for the weavers of Kota Doria saris, the future is far from rosy. Weaving in Kaithoon, about 15km from Kota city, is done mostly by women on pit looms. Almost every household in the village has a loom. But the demand for saris and other drapes such as dupattas and stoles has dried up.

Threads of despair: Almost every household in Kaithoon, a village near Kota city, has a loom. But the demand for the famous Kota Doria saris and other drapes has dried up   -  TINA EDWIN

 

A typical Kota Doria sari combines cotton and silk threads to create the check design and the light feel. The handloom products are far more expensive than mill-made ones and few consumers are willing to pay the premium. Regular bulk orders are rare, so most women work for the master weavers or whenever there are orders from designers in cities.

A popular brand, with multiple outlets across the country, was once a bulk buyer of Kota saris and other drapes, but it no longer stocks them, says Badrun Nisha, secretary of the self-help group Women Weavers Association of Kaithoon. The Kota saris still enjoy a market in south India, and Nisha takes her creations to exhibitions in Hyderabad. But the weavers need assistance from the government and others to find new markets.

Making Kota great again

With the local industrial units facing multiple problems, Kota’s businessmen view the flourishing coaching sector — valued at ₹2,000 crore — as a godsend. Some bank on income from ancillary activities — such as hostels, shops and restaurants.

But the residents have not given up on Kota’s potential to once again shine as an industrial hub. The state needs to pursue investors aggressively the way Gujarat and some other states do, they say. Kota continues to have stable power and water supply, as also good road and railway connectivity. It has plenty of hotels rooms, including the premium category. However, the nearest airport in Jaipur is about 250 km away. A local airport has been a long-standing demand of the industry associations. The district is now counting on its parliamentary representative, Om Birla, who is also the Lok Sabha Speaker, to draw the Centre’s attention on the need to rejuvenate Kota.

Until then, the town must content itself with the tagline ‘Once known for saris and stones’.

Published on September 27, 2019
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