State of the Economy 2018

Cutting it fine

Pimpri-Chinchwad continues to battle rising commodity prices and labour cost but remains cautiously optimistic

Photographs by Soumik Kar

It was in 1954, when Hindustan Antibiotics first set up its manufacturing facility in Pimpri-Chinchwad and since then, the industrial hub has evolved into one of the biggest automotive hubs in the country. Home to auto original equipment manufacturers (OEMs) such as Tata Motors, Force Motors, Bajaj Auto, Mercedes-Benz and Volkswagen, the cluster seems to have gotten back on track. During our previous visit in 2014, the automotive hub was battling sluggish demand and rising inventory, in the middle of a painful slowdown. At that time, manufacturers that were highly dependent on exports, fared well. With the domestic auto industry in a much better shape now, as compared to 2014, around 85% of the respondents in our survey said revenue growth in FY18 was stable to positive. 

Although auto is the dominant industry in Pimpri-Chinchwad, the hub also houses companies in the engineering, pharmaceutical and the information technology space, thanks to its proximity to Mumbai and the availability of skilled and unskilled manpower. While Goods and Services Tax (GST) did bring some uncertainty, it didn’t have any major impact on the business, post the initial hiccups. In fact, only 15% of them feel that GST had a negative financial impact on their business. But more importantly, most of them are concerned about future demand. Owing to the uncertainty about how demand will pan out in FY19, almost 66% of the manufacturers surveyed, said they are unsure about expanding capacity and hiring more people in the coming fiscal.

Ready but not ready
Last year, in July, when the country replaced the plethora of taxes with GST, although it didn’t take the manufacturers in Pimpri-Chinchwad by surprise, some struggled to adjust to the new tax regime. But now after the chinks have been ironed out,85% of them agree that the teething troubles with GST’s implementation are over. “We did have a few operational difficulties initially but GST has reduced our paperwork considerably and we are happy,” said Nandlal Khatan, managing director, Pune Techtrol. The firm that clocked revenue of Rs.


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