Once famous, Mandi’s gun factories on brink of closure

Dushyant Singh Pundir

Tribune News Service

Mandi, August 30

Once famous for manufacturing branded weapons under the tag ‘Mandi Guns’, this historic town of Himachal Pradesh is fast losing its relevance in the sector.

From shortage of trained manpower to lack of buyers in the market, the four gun-manufacturing units of the town, established post-Independence, have been facing umpteen problems and are now on the verge of closure.

The owners of these factories put the blame on non-availability of raw material in the state, heavy taxation, shortage of trained labour, limited quota and long testing period.

Once a flourishing business

Set up in 1949, Cousins Gun Manufacturers earlier used to make guns for the Army in the erstwhile Mandi state. LV Sharma, owner of the firm, says his grandfather Ganesh Mistri, who used to repair and maintain guns of the Mandi state, established the factory in 1949.

“Once a seller’s market, it has now become a sick industry as there are only a few buyers available in the market due to limited issuance of arms licences by the government,” he says.

It was a flourishing business before 2006 and at that time, the gun houses were not able to meet the requirement of the market. But after 2006, the government tightened norms for arms licences and the trade started dwindling.

There was a period when Cousins used to sell its guns three years in advance. But now the company is unable to even complete its yearly quota due to stagnation in the market. “If the government becomes a little liberal in issuing licences, the business can flourish again,” says Sharma.

Checking illegal weapons

The owner of another firm Prem Sagar and Sons, Ashok Kumar, demands that the government must change its policy regarding issuance of individual arms licences. “To get a licence for self-protection, a person has to first prove that there is a threat to his life. Will a criminal inform in advance before committing crime!” he questions.

Ashish Oberoi, son of Ashok Kumar, says licences are currently given on selective basis and there must be some liberty in awarding these to curb the trade of illegal weapons. There should not be any unnecessary rejection in issuance of arms licences, he says. The factory owners reject the government’s clause that more arms licences may lead to spurt in crime. According to the National Crime Records Bureau, over 85 per cent of the murders in 2014 were committed with unlicensed firearms.

The licensing authority, after considering the application filed under the criteria laid down, should grant or refuse a licence to any person by recording in writing the reasons for such grant or refusal, says Kumar.

Demand for increase in quota

Oberoi says they have already finished their yearly quota of 936 guns and had to send their labour on leave as there was no work left for the rest of the year, he said.

In 1976-77, Sharma says, they received an order from Sri Lanka to manufacture 2 lakh weapons, but the government did not give permission to manufacture beyond the allocated quota and the order had to be cancelled. The units, as such, are learnt to be working at no-profit-no-loss basis.

The factories rue that their quota was increased only once some 20 years ago. “Apart from being liberal in granting licences, the government must increase manufacturing quota too,” demands Oberoi.

Skilled labour lacking

There is also a shortage of trained labour as not many workers are learnt to be willing to pass on skills to the next generation. “Being a small scale industry, the salaries too are not very high in the trade,” says a worker. To overcome the shortage of trained manpower, the factories had approached the Industrial Training Institute (ITI) in Mandi to introduce a course so that they could get trained staff but to no avail. A few students from other trades were hired from the ITI, but they too did not show much interest.“Gun manufacturing is a long and tardy process. We have to send guns in batches to an ordnance factory at Jabalpur in Madhya Pradesh for testing and sometimes it takes more than two months,” says Sharma.

Testing too is a cumbersome affair. The government should open a testing centre in Kangra district, which would also be suitable for the gun manufacturers in Jammu and Kashmir where more than 30 units are located, says a unit owner.

Shortage of raw material

There is also a shortage of raw material. After Himachal Pradesh High Court banned the auction of walnut wood in the state, the factories had no option but to procure it from Jammu and Kashmir, which increased its cost by five times.

As there is a shortage of walnut wood even in neighbourng states, the factories have started using sesame and teak from Madhya Pradesh for manufacturing wooden parts of the gun.

There used to be a quota for Himachal traders in Punjab markets, but it was scrapped later.

No special gun metal was available in the country due to low demand. They could import special gun metal from abroad but it would increase the cost manifold which would not be wise for a business on its last legs, says Sharma.

‘Heavy’ taxation

“Heavy taxation” is another issue burdening the manufactures. Heavy taxation had also put an extra burden on them and reduced the profit margin to minimum and now they could say that they were doing business on no profit no loss basis, said Oberoi.Gun factories were included in the category of Small Scale Industries and exempted from 12.5 per cent CST, but the exemption was done away with subsequently. Sharma says they could not compete with international manufactures due to non-availability of quality raw material and stringent laws.

New arms policy ‘will a disaster’

Factory owners feel that if implemented as such the new arms policy will be a disaster for the beleaguered industry. “The factories will last for a few months and they will not be able to carry forward the business in such conditions,” say unit owners.

In the draft policy, the government tends to centralise the entire process instead of liberalizing it. With tougher rules, it will be difficult to do business, they say. Instead of simplifying the process, the government is complicating it. They say that there should be a system for single window clearance.

The Arms Rule, 1962, had been unreasonably and arbitrarily abolished. Minor amendments in the rules of 1962 policy would have solved the purpose, they add. To install machinery and purchase of raw material by the factory owners, various provisions have been inserted for approval in the Draft Rules. The PSU culture is being imposed through the Draft Rules. And fear is that no corporate will come forward in these ‘suffocating conditions’, they say adding that every effort has been made to centralise powers in the Draft Rule. One has to run from the Ministry of Home Affairs to the Ministry of Defence to the Ministry of Commerce to seek clearances.