Punjab’s brick kiln sector is facing unprecedented financial strain as rising taxes, costly technological requirements, and expensive raw materials converge to erode profitability. Industry operators report that the combination of GST on coal, increased mining royalty on earth, and mandatory upgrades to cleaner technologies has sharply escalated their operating expenses. Many kilns, especially smaller units, are struggling to stay viable amid shrinking margins, inconsistent supply chains, and intensifying regulatory pressure. As production costs surge and demand fluctuates, the sector—long considered a rural economic backbone—is confronting a systemic slowdown that threatens both employment and long-standing local enterprises.
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GST on Coal Drives Operating Costs Higher
Brick kilns rely heavily on coal, and the imposition of GST has significantly inflated fuel costs. Operators note that coal expenses now constitute one of the largest components of total production cost, with little flexibility to absorb these increases without raising brick prices.
Coal supply disruptions and inconsistent quality further complicate the financial outlook. Many kiln owners argue that the uniform tax framework fails to account for regional variations in access, transportation, and supply conditions, creating an uneven cost structure for producers across Punjab.
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Enhanced Mining Royalty Intensifies Financial Pressures
Another major factor destabilizing the sector is the increase in mining royalty on soil—the primary raw material for brick manufacturing. Higher royalty rates have directly elevated input costs, leaving kiln owners with reduced margins even before production begins.
Small-scale kilns, which typically operate with lower working capital, are particularly vulnerable. Many report that they are compelled to procure soil from distant locations due to limited local availability, adding substantial logistics costs on top of the increased royalty.
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Compliance With New Technology Mandates Adds Capital Burden
The government’s push toward cleaner and more energy-efficient technologies, while environmentally justified, has created additional capital expenditure requirements for kiln owners. Mandated upgrades—including improved firing systems, emission control mechanisms, and energy-efficient designs—require significant investment.
For several operators, the shift to new systems has strained cash flows. Those unable to afford immediate upgrades face the prospect of temporary or permanent closure, accelerating the decline of traditional brick-making enterprises.
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Industry at a Crossroads
Taken together, these three cost drivers—GST on coal, higher mining royalty, and mandatory adoption of new technology—have placed brick kilns in a precarious position. Many units are reducing production cycles, cutting workforce numbers, or shutting operations altogether.
The sector’s slowdown carries broader economic implications. Brick kilns contribute to rural employment, infrastructure development, and local supply chains. A long-term contraction risks destabilizing these interconnected systems, potentially raising construction costs across the state.
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A Call for Balanced Policy Intervention
Industry associations are advocating for reconsideration of taxation structures and financial support to facilitate technological transitions. They argue that a balanced approach—one that simultaneously protects environmental goals and ensures the economic survival of the sector—is essential.
Policymakers now face a crucial task: crafting a regulatory framework that stabilizes the industry without compromising sustainability. With the sector at risk of decline, timely and targeted interventions may be key to preserving Punjab’s traditional brick-making ecosystem while guiding it toward a more modern and environmentally responsible future.
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