While gas-based large industries continue to face fuel shortage, the small industries in Gujarat has a reason to cheer. The state government is considering allocating lignite directly to the small and medium industries through the National Small Industries Corporation (NSIC) from Rajpardi mines in south Gujarat.

 

According to top government officials, the state government has given in-principle approval to the plan, which will ensure cheap fuel for the small industries. The government has appointed NSIC, a government of India enterprise as nodal agency to distribute lignite among the small units.

 

“As per the draft agreement, NSIC will act as the nodal agency, where the units will place their demand and subsequently NSIC will inform GMDC to supply lignite to the concerned unit,” said P K Jha, regional head, NSIC - Ahmedabad.

GMDC will supply about 40,000 metric tonnes of lignite periodically from its Rajpardi mines near Bharuch.

 

“The management has given in-principle approval and we shall begin supplying after a final decision,” said a GMDC source.

 

The state government’s move is seen as a boost for the growth of small industries in the state. Textiles, chemicals, dyes and processing units in the south and central parts of Gujarat are likely to benefit from the move.

 

“Important is that the units will get lignite in a shorter time and at much cheaper rate than the premiums charged by other suppliers. This will reduce the cost of production and make our units competitive,” said Paresh Patel, past president, Southern Gujarat Chamber of Commerce & Industry.

 

The units will make payment to NSIC and submit demand for the required quantity. Subsequently, NSIC will verify the unit’s demand and send an advice to the state-run miner, Gujarat Mineral Development Corporation Ltd (GMDC). As per the agreement the delivery is to be made within 48 hours of the submission of the request by the unit.

 

As the financial assistance under its raw material procurement scheme, NSIC will provide weak units a 90-day repayment cycle with interest rate of 11.95 per cent, much below the 14.5 per cent interest rate charged under stock hypothecation by banks, Jha informed.

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