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Sunday, March 22, 2009

Tatas eyeing 10 lakh Nano bookings in two weeks

Tata Motors’ Nano, the world’s cheapest car, is poised for another milestone. The company is likely to book a whopping 10 lakh cars in the first fortnight starting March 23, company sources said.

The previous best in India was Fiat Uno, which did about 2.90 lakh bookings in 1995-96.

Simply put, this means a collection of Rs 7,000 crore in a span of two weeks as booking amount for each car will be around Rs 70,000.

All dealers of Tata Motors and select branches of State Bank of India (SBI) will accept bookings simultaneously across the country.

The first batch of cars will roll out from the Pantnagar plant in Uttarakhand, which has a capacity to produce only 3,000 cars per month. Situation will ease only after the company’s Sanand plant near Ahmedabad, which will have an initial capacity of producing 250,000 cars per annum, becomes operational in one year.

A survey by Crisil suggested that Nano’s launch could expand the Indian car market by 65 per cent. The increase in the market is expected to push up car sales by 20 per cent over previous year.

Allotment will be made through a draw and, going by projections even during this recession, those at the top of the draw would have the choice of becoming proud owners of the first Nanos, or getting a premium in the black market.

Friday, March 20, 2009

Govt estimates 500,000 job losses in textile industry

The estimate is less than industry’s estimate by half.

The Union textile ministry estimates that between 300,000 and 500,000 people will lose their jobs in this labour-intensive sector by March 31, due to the ongoing global economic downturn.

The government’s estimate is well below the projections of industry lobby groups, which put the number at around 1 million.

The textiles and garments industry is the second-largest employer in India after agriculture. It directly employs 35 million people and indirectly provides livelihood to about 88 million people.

“According to a survey carried out between October 2008 and December 2008, which covered 3,000 units, it was found that 0.92 per cent of workers would lose their jobs,” said a senior official of the ministry. Based on this survey, the overall industry job loss was extrapolated.

However, the textile industry contradicts this and projects a much higher figure of 1 million people who would be rendered jobless by the end of the current financial year.

This sector has been badly hit by the ongoing global recession, which has resulted in closing of many units. About 50 per cent of the total production of textiles and garments in India is exported, of which 60 per cent is exported to the United States and the European Union countries. But the recession in the West has hit the demand.

Indian exporters of textiles and garments are facing stiff competition from manufacturers in Bangladesh, China, Vietnam and Sri Lanka, which produce goods at much cheaper rates.

“There would be a drop of 3 per cent in overall production in the industry, which would see a job cut of around 10.5 lakh (or 1.05 million),” said DK Nair of the Confederation of Indian Textile Industry (CITI). He added that since many units might retain some workforce for new orders, this number would stand at 1 million.

The ministry official, however, disputed this figure, saying that the number of people losing jobs could not cross 500,000 due to the depreciating Indian rupee, which would have a positive fallout on the entire textile industry.

About 5,000 people were rendered jobless due to closure of 12 mills in the organised sector in the September 2008-January 2009 period, when the situation was at its worst. This, according to Nair, is not a correct indicator because the organised sector contributes to just 3 per cent of total textile production.

While 97 per cent of the spinning units are in the organised sector, only 3 per cent of the fabric manufacturing industry is in the organised sector. The entire garment industry comes under the unorganised sector.