Coimbatore: Freebies not paid for yet, suppliers to get Rs 400 crore

COIMBATORE: Free grinders with a gleaming Amma have arrived in most households in Tamil Nadu. But the grinder makers of Coimbatore, who supplied the freebies to the government, are not smiling as they are yet to be paid a whopping Rs 400 crore for their supplies.

In the wet grinder making hub of Coimbatore, the manufacturers, who supplied grinders for the state government’s free scheme, are vexed over the delay in disbursing about Rs 400 crore for the 35 lakh grinders they supplied.

The grinder makers say they are under tremendous pressure from the banks and the spare parts suppliers to make payments. Manufacturers say their properties, which they have pledged to get the bank loans, may go up for auction if they are not paid the dues by March 31 by the State-run Tamil Nadu Civil Supplies Corporation.

The orders for producing about 1.7 crore grinders was awarded to 12 major grinder manufacturers by the Tamil Nadu government.

The industrial centre of Coimbatore as a major grinder production hub got the lion’s share of the orders, besides, a few more companies from Chennai and Erode districts got the tender.

The 1.7 crore grinders were manufactured in five phases over the past four years. Though the manufacturers were paid the amount till the fourth phase, the government has not settled the amount for the last phase, which is around Rs 400 crore for making the grinders.

‘Officials failed to keep their word on clearing dues by December 2015’
Free grinders have arrived in most households in Tamil Nadu. But grinder makers of Coimbatore who supplied the freebies to the government, are not smiling as they are yet to be paid a whopping Rs 400 crore for their supplies.

According to M Radhakrishnan, president of the Coimbatore Wet Grinders and Accessories Manufacturers Association (COWMA), said, “the final order for 35 lakh grinders was  completed and delivered before October 2015. Though the officials assured us of clearing the amount in December 2015, we have not got the amount so far.”

About 1,000 major and small industrialists including manufacturers, spare parts suppliers, job working unit owners are affected due to the pending payments, he said.

A team of industrialists met the higher officials in TNCSC recently to press their demands. “We are waiting hopefully for positive reply from the officials. Further delay will create severe impact for the grinder manufacturing hub in Coimbatore,” he added.

“Industries should submit their sales tax and central excise duty before March 31. With the delay in payment from government, we are in a fix now. The banks are also increasing pressure for loan repayment,” he said.

A grinder manufacturer, who supplied 10,000 grinders in the last order, said, “I got the bank loan for furnishing the order and it should have been settled last December. However, based on the promise from the officials of Tamil Nadu Civil Supply Corporation, we got the relaxation for three more months. While the deadline of March 31 is nearing, we have not received any positive sign from officials.”

Another supplier, said, “The chain of industries from manufactures to job working units involved in the grinder supply for the government scheme are in big trouble without money for reinvestment. After March 31, the banks may take steps for auctioning our pledged properties for the loans.”