Little room: Businesses struggle for expansion in Kolhapur and Sangli

Stifled growth: Businesses grapple with land shortage and soaring power tariffs

Businesses in Kolhapur and Sangli are eager to expand, but they are hindered by the lack of available land parcels and grappling with some of the highest power tariffs in the country.

Kolhapur currently hosts five Maharashtra Industrial Development Corporation (MIDC) zones: Kagal-Hatkanangale, Gokul Shirgao, Gadhinglaj, Halkarni, and Shiroli.

Sanjay Shete, vice-president of the Kolhapur Chamber of Commerce and Industries, expressed frustration: “How will industries grow when there is no land for expansion? Despite government encouragement to expand, the scarcity of land persists. Small-scale industries are struggling to find suitable spaces for expansion, with 500-700 pending applications.”

While a sixth MIDC spanning 650 acres is in progress, completion is expected in six months. Foundry and casting units dominate the industrial landscape in the district.

Dhananjay Mahadik, a Rajya Sabha Member of Parliament from Maharashtra, highlighted the persistent demand for expansion despite the existing MIDCs: “Even with five MIDCs, demand for expansion remains robust. Acquiring land is challenging, even when government land is available, as local resistance to industrialisation is common.”

Mahadik further elaborated on expansion plans: “We have identified six expansion spots in Kolhapur. The first 650-acre parcel is in process, primarily to accommodate foundry and casting businesses.’

The challenge of land scarcity also plagues Sangli district, located a little over 45 kilometres from Kolhapur.

Prakash Shah, director of Preetam Shakti, a plastic pipe company in Sangli, emphasised the scarcity of land for expansion, forcing factories to seek distant locations or purchase agricultural land.

Power tariffs pose another hurdle for industries in both districts.

Shah lamented: “Power, labour, and bank interest are paramount concerns. Other regions like Diu, Daman, and Silvassa offer lower power tariffs, attracting many companies away from our area.”

He cited the current tariff of Rs 13 per unit as one of the highest in the country, impacting operational costs.
 

Shete raised concerns over restrictions imposed by MERC (Maharashtra Electricity Regulatory Commission) on open access, limiting consumers’ ability to procure electricity directly from generators or the open market.

Shah advocated for uniform power tariffs nationwide to enhance competitiveness, echoing calls for skilled labour availability and policy revisions.

“Skilled manpower is only available in metro cities and they prefer to work in larger companies than work in companies like mine. This is another issue which needs to be addressed.”

Lalit Gandhi, president of the Maharashtra Chamber of Commerce, Industry, and Agriculture, underscored power costs as a major portion of raw material expenses, urging policy reforms and open access to alleviate the burden on industries.

In Ichalkaranji, a major textile hub, electricity tariffs rank among the nation's highest. Stakeholders have urged the government to permit self-use of renewable energy under the Textile Policy 2023-28.

Chandrakant Patil, president of The Ichalkaranji Powerloom Weaver’s Co-op Association, criticised tariff conditions under the textile policy, urging alignment with renewable energy goals.

Shyamsunder Marda, the owner of an Ichalkaranji-based textile company, advocated for legislation akin to the Handloom Reservation Act to support the textile sector.

Patil emphasised the need to monitor duty-free imports of textiles and garments to protect domestic industries.