The State of Business 2013

Keeping up appearances

Power and labour shortage, and crumbling infrastructure spoil the party for Ludhiana’s industrial units

Bhupinder Singh

The drive from New Delhi to Ludhiana, the largest city in Punjab, takes six hours on roads lined with picturesque mustard fields reminiscent of Yash Chopra movies. The dream ride ends abruptly as you enter the congested city limits where traffic begins to crawl. The first thing you’ll notice here is the row of luxury car showrooms lined up with Mercedes, BMW and Audi cars, which makes you wonder about the wealth this town holds. Is business doing well, then? “We Punjabis are flamboyant people,” laughs Rahul Ahuja, managing director of Rajnish Industries and vice-chairman of the CII Ludhiana zonal council. “Punjab has the highest number of luxury cars in India. We also have the most loan defaulters.”

It is an interesting paradox, the kind you will perhaps see only in Punjab. Business may be down but for the proud Punjabi it is important to keep up appearances. Behind the glittering façade of prosperity is an industrial town that is slowly crumbling under the pressures of power and labour shortage, and government apathy. From auto components to Ludhiana’s mainstay textile industry, many units have either shut down or moved to other clusters in Gujarat, Rajasthan, Manesar, Himachal Pradesh and Madhya Pradesh.  

Clashing gears

Ask any of Ludhiana’s many auto component makers about business, and they point to a telling factoid: in the past 25 years, not a single large automobile manufacturer has set up base in the town. This, despite the presence of 10,000 micro, small, medium and large automobile component manufacturing units in the cluster. “Punjab is going backwards,” says Ahuja, whose firm makes diesel fuel injection spare parts for the domestic and export replacement market. Rajnish Industries has four manufacturing units in Ludhiana that employ 600 people. “Gurgaon became a city because of Maruti. The Punjab government should bring in a big anchor unit.” 

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