Rajkot tractor industry may see revival post Budget assistance

Gujarat government allotted Rs 120 crore to farmers to buy new tractors in Budget

With the Gujarat government announcing assistance to the tune of Rs 120 crore in the state Budget for 2015-16 for farmers to buy new tractors, the tractor industry in Gujarat is hopeful of a turnaround following a lean period caused by erratic monsoon.

Till 2013-14, tractor industry's growth in Rajkot, a major hub, was good. But, dull and erratic monsoon last year brought down sales of tractors across the country and consequently, most of the players cut down the production by 50 per cent over hte last few months.

Rajkot is the hub of mini tractor manufacturing over the last decade in India. There are nearly 30-35 organised and unorganised players in mini tractor in Rajkot and its vicinity. Some big players like Mahindra & Mahindra and Escort Group have already set up manufacturing facilities in collaboration with local companies between 2009 and 2012 in Rajkot. Captain Tractor Private Limited (CTPL) has already in the mini tractor manufacturing since 1998 in the city.

"The announcement by the Gujarat government will support the tractor industry in Rajkot in the current recessionary period. However, it will take some time to come out of it. Most of the players have cut down the production by 50 per cent as demand is not there," said Suresh Santoki, managing director, Amul Industries Private Limited.

Amul Industries has forged alliance with Escorts Group for manufacturing mini tractor in the city. For this, both Amul and Escorts have signed an Memorandum of Understanding (MoU) in August and formed a Special Purpose Vehicle 'Adico Escorts Pvt. Ltd.' in December 2011. Mahindra is producing mini tractor in collaboration with city-based Field Marshal Group since 2009 at Rajkot.

Keyur Vekariya, director, White Wagon Private Limited said, "The impact of the decision will be seen at the time of monsoon. If monsoon progress is good, then it will surely increase sales of tractors."

According to the data shared by industry, about 40,000 mini tractors were sold in India in 2013-14 with the industry's average growth at 25-30 per cent. Of these nearly 14,000 units were sold in Gujarat and 17,000 mini tractors were sold in Maharashtra. Up to 30 Horse Power HP tractor is known as mini tractor.

According to Vekariya, only 4,000-5,000 tractors have been sold this year so far across the country because of weak monsoon.