Tyres-Not a Multiplication Sum

February 6, 1971 A Correspondent writes:
GOVERNMENT 's licensing policy is getting curiouser ana curiouser. Automotive tyres, which have been so much in the news recently, are a case in point. The total licensed capacity of the eight factories producing automotive tyres is 4.9 million. Letters of latent for an additional capacity of 700,000 tyres have been issued by Government When this additional capacity is installed along with the balance of existing licensed capacity, the total installed capacity will be 5.6 million. All of this capacity is, however, unlikely to be available until 1974-75. And, as recent experience shows (in 1970 alone, the four- month strike at the Ceat factory and go slows and labour problems at Inchek, MRF and Goodyear factories resulted in production losses of over 2.5 lakh tyres), production may not fully come up to installed capacity. In fact, the tyre industry has never produced at more than 90 per cent of its installed capacity. Therefore, at most some 5 million tyres may be produced in 1973- 74 on the basis of the then existing licensed capacity.