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Archana Chaudhary

MUMBAI, Dec. 5

POOR quality assembled kits have cornered around 80 per cent of the Rs 700-crore Indian agricultural pump sets market, according to figures compiled by the Indian Pump Manufacturers' Association.

``Over 150 medium sized pump manufacturers, including larger players such as Kirloskar and KSB Ltd in Western India and Texmo and Aqua in the South, have seen their market shares and revenues dwindle to 20 per cent this year,'' Mr Harshad M Joshi, Director, Shroffs Engineering Ltd, and past president of IPMA, told Business Line.

This means an estimated tax evasion of around Rs 100-120 crore and includes excise evasion of roughly Rs 30 crore as per the branded pump manufacturers. The organised sector comprising duty paying manufacturers contribute about Rs 100 crore towards taxes including Rs 25 crore as excise duties.

Branded pumpsets, which are far better in quality and are ISI branded, are presently around 40 per cent dearer than kits available throughout the Indian countryside.

According to IPMA, farmers have been shifting to the cheaper and low quality assembled kits that are being aggressively sold by networks of scattered small players and mechanics throughout the country.

The study has shown that since 1996, branded pumps have seen market share plunge from 55 per cent (it was 62 per cent in 1992) to 26 per cent in the year 2000.

A study conducted by IPMA and the Southern India Engineering Manufacturers' Association, in Andhra Pradesh, farmers, especially those with lower education level, preferred spurious kits as these are available at Rs 9,000 per piece against the Rs 15,000 for a branded pump.

Although the average life of branded pumps is roughly 10 years compared to three years of the kits, consumers are choosing the latter. The study says there is lower or no awareness that users are shelling out Rs 36,644 for each kit compared to Rs 16,515 they would have to spend on their branded pumpsets over 10 years, as per the study.

What the branded players now fear is that their ``wafer-thin'' margins may take a further knock if the Centre increases tax rates to 8 per cent Modvat from the present 4 per cent excise levy, in the 2003 Budget.

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