The increase in excise duty on pan masala and gutkha manufacturers coupled with infrastructural snags has taken a severe toll on the renowned gutkha and pan masala industry of Uttar Pradesh.
According to industry estimates, the business which ran to the tune of Rs 3,000 crore has now reduced by over 60 per cent to Rs 1,000 crore at present due to the closure and migration of manufacturers.
Kanpur formed the major chunk of gutkha and pan masala product manufacturers, apart from neighbouring Jhansi and Urai being home to rest of production from the state. A major portion of these products emanated from Small and Medium Enterprises (SMEs) which employed over 50,000 people across the state.
According to the apex SME body, Indian Industries Association (IIA) member, P C Kurele, there were over 300 gutkha brands manufactured at Kanpur till 2007, which have now reduced to fewer than 100 now. “Most of the manufacturers have shut down owing to high input costs and newer stringent registration norms which entail costs prohibitive for smaller manufacturers,” he explains.
A significant number of makers have also relocated outside the state, especially to National Capital Region (NCR), where the norms for setting up a new production capacity are simple and involve lesser administrative hurdles.