ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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From 50 Years Ago: Long Rein for Short Run

Vol IV, No 36 september 6, 1969

Long Rein for Short Run

The incentives offered to the newsprint industry have apparently left entrepreneurs cold. Only Thapars have any firm proposal, and newspaper reports reflect Government’s apprehension that the onus of the Fourth Plan programme might therefore fall on itself. Demand for newsprint at the end of the Plan is estimated at 260,000 tonnes. Against this, the Plan aims to achieve a capacity of 165,000 tonnes. NEPA in Madhya Pradesh is expected to expand to 75,000 tonnes; Thapars’ plant in Himachal Pradesh will eventually have a capacity of 60,000 tonnes; and a public sector plant of a capacity of 75,000 tonnes is ‘under consideration’ for Piravam in Kerala.

Will these projects meet the Fourth Plan production target within the next four years? And, why, if demand will yet be almost 100,000 tonnes ahead of supply, is the private sector’s response so poor? For the record at least the ­industry stands decontrolled and delicensed. It is, therefore, prima facie odd that entrepreneurs do not come forward to garner the benefits of assured demand and a free market. True, raw material supply for newsprint manufacture is nowhere so easily accessible in India for plants to benefit from the economies of scale that ­favour leading newsprint manufacturers in the world. True, too, that fuel, chemical, and raw material costs, have been rising. Yet the short market should enable Indian manufacturers to make up for this handicap in costs. …

The nub is that decontrol is not in fact operative. … In an apparently free market, and despite the assured demand, therefore, entrepreneurs must find the delays and profitability unattractive.

Updated On : 6th Sep, 2019

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