NCM-FEBRUARY 2014 NEWS BRIEFS 88 News from the Ministry of Textiles (MoT), Govt. of India India’s Share in Global Textile Market As per data released by WTO Secre- tariat for the calendar years 2009, 2010 and 2011, the share of Indian textiles and clothing exports in world’s export were 3.98%, 3.98% and 4.11% respectively. The Government has made various policy interventions to increase the Indian share in global trade and to increase annual produc- tion of textile goods including the schemes like Technology Upgradation Fund Scheme, Scheme for Integrated Textiles Park, Integrated Skill Devel- opment Scheme and Integrated Pro- cessing Development Scheme. The Ministry of Textiles has been in receipt of representations from vari- ous Councils and Industry Associa- tions including SIMA and CITI for policy support. The recommendations of the Ministry of Textiles on the pro- posals have been sent for consider- ation/inclusion in Foreign Trade Policy and Budget 2014-15. The above information was given by the Minister of State in the Ministry of Textiles Smt. Panabaaka Lakshmi in a written reply in the Rajya Sabha. Apparel/Textile Sectors The role of the Government is to en- sure conducive policy environment, facilitating in creating enabling condi- tions for the industry and private en- trepreneurs to set up units through policy initiatives and schemes. Some of the schemes / measures are Technology Upgradation Fund Scheme (TUFS), Scheme for Inte- grated Textile Parks (SITP), Integrated Skill Development Scheme and Schemes for the development of the Powerloom Sector. The Govt. has not fixed any produc- tion target for textile items including fabrics/apparel. However, the Working Group on Textile and Jute Industry for Twelfth Plan made the projection for production of cloth by mill, powerloom, handloom, hosiery, etc. during Twelfth Five Year Plan. Extension in the implemen- tation period of modified re- vival, reform and restructur- ing package for handloom sector The Cabinet Committee on Economic Affairs has approved the extension of two months that is up to 28.02.2014 in the implementation period of the Revival, Reform and Restructuring (RRR) package for the handloom sec- tor. Earlier the last date of implemen- tation period of this scheme was 31.12.2013. There is no financial implication of the proposal as the RRR package would be implemented according to the ap- proved financial outlay of Rs.3130 crore out of which Rs.1100 crore is for waiver of overdue loan and recapi- talization assistance and Rs. 2030 crore for concessional credit compo- nent. The initiative is expected to benefit about 1500 additional apex and pri- mary weavers cooperative societies in addition to 4739 societies covered till 31.12.2013 under modified RRR package. The approved interventions will help in re-opening choked credit lines for handloom weavers’ coopera- tive societies and the individual weaver, and fresh credit will be pro- vided at cheaper rate of interest with credit guarantee resulting in bringing them back into positive networth af- ter financial support. NABARD is the implementing agency of the package. Background : In pursuance of the budget announce- ment of 2011-12, a scheme - 'Revival, Reform and Restructuring (RRR) Package' was approved by the Gov- ernment in November, 2011 and only viable and potentially viable apex and Primary Weavers Cooperative societ- ies (PWCs) based on the audit of 2009-10 were eligible to avail benefit. Till 31.10.2013, besides 50403 indi- vidual weavers and 5462 Self Help Groups (SHGs), out of 44 apex and 15,926 PWC societies, which are functional, only 24 apex and 4073 PWCs were found eligible as per the eligibility norms under the scheme. On requests from various States and handloom organizations to relax eligi- bility norms, the Government of India approved modifications on 23.09.2013 in the RRR package by relaxing cer- tain eligibility norms and extension of the scheme upto 31.12.2013. The re- vised scheme also facilitates cheaper credit at the rate of six percent inter- est rate to the handloom sector in line with the budget announcement of 2013-14. As per modified guidelines, States had to first carry out statutory audit of all their apex and PWC societies up to 2011-12 and also make budgetary provision of the required State share. Till 31.12.13, around 4739 coopera- tives have been covered. Due to the State Assembly Elections in five states, the statutory audit of apex and PWC societies and subsequently spe- cial audit by NABARD has been de- layed. These states need additional time for completion of the audit. Some other states also could not complete the statutory audit of cooperative so- cieties within 31.12.13 and demanded one more month to complete the work. Therefore, the Ministry proposed to extend the last date of implementa- tion of the RRR package by another 2 months. Share of Technical Textile in all Forms of Textiles The share of technical textiles in all
Transcript
NCM-FEBRUARY 2014
NEWS BRIEFS
88
News from the Ministryof Textiles (MoT), Govt. ofIndia
India’s Share in Global Textile
Market
As per data released by WTO Secre-tariat for the calendar years 2009,2010 and 2011, the share of Indiantextiles and clothing exports in world’sexport were 3.98%, 3.98% and 4.11%respectively. The Government hasmade various policy interventions toincrease the Indian share in globaltrade and to increase annual produc-tion of textile goods including theschemes like Technology UpgradationFund Scheme, Scheme for IntegratedTextiles Park, Integrated Skill Devel-opment Scheme and Integrated Pro-cessing Development Scheme.
The Ministry of Textiles has been inreceipt of representations from vari-ous Councils and Industry Associa-tions including SIMA and CITI forpolicy support. The recommendationsof the Ministry of Textiles on the pro-posals have been sent for consider-ation/inclusion in Foreign Trade Policyand Budget 2014-15.
The above information was given bythe Minister of State in the Ministryof Textiles Smt. Panabaaka Lakshmiin a written reply in the Rajya Sabha.
Apparel/Textile Sectors
The role of the Government is to en-sure conducive policy environment,facilitating in creating enabling condi-tions for the industry and private en-trepreneurs to set up units throughpolicy initiatives and schemes.
Some of the schemes / measures areTechnology Upgradation FundScheme (TUFS), Scheme for Inte-grated Textile Parks (SITP), IntegratedSkill Development Scheme andSchemes for the development of thePowerloom Sector.
The Govt. has not fixed any produc-tion target for textile items includingfabrics/apparel. However, the WorkingGroup on Textile and Jute Industry forTwelfth Plan made the projection forproduction of cloth by mill, powerloom,handloom, hosiery, etc. during TwelfthFive Year Plan.
Extension in the implemen-tation period of modified re-vival, reform and restructur-ing package for handloomsector
The Cabinet Committee on EconomicAffairs has approved the extension oftwo months that is up to 28.02.2014in the implementation period of theRevival, Reform and Restructuring(RRR) package for the handloom sec-tor. Earlier the last date of implemen-tation period of this scheme was31.12.2013.
There is no financial implication of theproposal as the RRR package wouldbe implemented according to the ap-proved financial outlay of Rs.3130crore out of which Rs.1100 crore isfor waiver of overdue loan and recapi-talization assistance and Rs. 2030crore for concessional credit compo-nent.
The initiative is expected to benefitabout 1500 additional apex and pri-mary weavers cooperative societiesin addition to 4739 societies coveredtill 31.12.2013 under modified RRRpackage. The approved interventionswill help in re-opening choked creditlines for handloom weavers’ coopera-tive societies and the individualweaver, and fresh credit will be pro-vided at cheaper rate of interest withcredit guarantee resulting in bringingthem back into positive networth af-ter financial support. NABARD is theimplementing agency of the package.
Background :
In pursuance of the budget announce-ment of 2011-12, a scheme - 'Revival,
Reform and Restructuring (RRR)Package' was approved by the Gov-ernment in November, 2011 and onlyviable and potentially viable apex andPrimary Weavers Cooperative societ-ies (PWCs) based on the audit of2009-10 were eligible to avail benefit.Till 31.10.2013, besides 50403 indi-vidual weavers and 5462 Self HelpGroups (SHGs), out of 44 apex and15,926 PWC societies, which arefunctional, only 24 apex and 4073PWCs were found eligible as per theeligibility norms under the scheme.
On requests from various States andhandloom organizations to relax eligi-bility norms, the Government of Indiaapproved modifications on 23.09.2013in the RRR package by relaxing cer-tain eligibility norms and extension ofthe scheme upto 31.12.2013. The re-vised scheme also facilitates cheapercredit at the rate of six percent inter-est rate to the handloom sector in linewith the budget announcement of2013-14.
As per modified guidelines, Stateshad to first carry out statutory auditof all their apex and PWC societiesup
to 2011-12 and also make budgetaryprovision of the required State share.Till 31.12.13, around 4739 coopera-tives have been covered. Due to theState Assembly Elections in fivestates, the statutory audit of apex andPWC societies and subsequently spe-cial audit by NABARD has been de-layed. These states need additionaltime for completion of the audit. Someother states also could not completethe statutory audit of cooperative so-cieties within 31.12.13 and demandedone more month to complete the work.Therefore, the Ministry proposed toextend the last date of implementa-tion of the RRR package by another 2months.
Share of Technical Textile inall Forms of Textiles
The share of technical textiles in all
NCM-FEBRUARY 2014
NEWS BRIEFS
89
forms of textiles world over is 18.70%whereas the share of technical tex-tiles in India is 11.43%.
The Government of India, Ministry ofTextiles has taken several steps forthe growth and development of tech-nical textiles by which the share ofIndian technical textiles will improve.Some of the main steps are as fol-lows :
- Scheme for Growth and Devel-opment of Technical Textiles(SGDTT): This scheme waslaunched for tapping the potentialof technical textiles and to encour-age investments in this industry,during the year 2007-08 with anoutlay of Rs. 46.60 crore. It hadthree components namelyBaseline Survey, Creation ofAwareness and Setting up of fourCentres of Excellence. . Thescheme completed its tenure inthe year 2010-2011.
- Technology Mission on Techni-cal Textiles (TMTT) : Govern-ment has launched the TechnologyMission on Technical Textiles withtwo Mini Missions for five yearsstarting from the year 2010-11 withan outlay of Rs. 200 crore. Themain objectives of the scheme in-clude standardization, creatingcommon testing facilities with na-tional/international accreditation,indigenous development of proto-types and resource center with I.T.infrastructure and support for do-mestic & export market develop-ment of technical textiles etc.
- Formulation of special schemesfor the North East Region for dem-onstrating improvement in agricul-ture & infrastructure through the in-creased usage and promotion ofAgro and Geo Technical Textiles,respectively.
- Major machinery for manufactureof technical textiles has been cov-ered under Technology UpgradationFund Scheme (TUFS) with 10%capital subsidy in addition to 5%interest reimbursement to the
specified technical textile machin-ery.
- Under the Scheme for IntegratedTextile Parks (SITP), the Govern-ment provides assistance for cre-ation of infrastructure in the parksto the extent of 40% limited toRs.40 crore in which technical tex-tile units can also benefit.
- The major machinery for produc-tion of technical textiles is coveredin the concessional customs dutylist of 5%.
- Specified technical textile prod-ucts are covered under FocusProduct Scheme. Under thisscheme, exports of these productsare entitled for duty credit scripequivalent to 2% of FOB value ofexports.
The information was given by the Min-ister of State in the Ministry of Tex-tiles Smt. Panabaaka Lakshmi in awritten reply in the Rajya Sabha.
Launching of Integrated Pro-cessing DevelopmentScheme (IPDS)
The government has approved thelaunching of a new Integrated Pro-cessing Development Scheme (IPDS)to establish four to six Brown Fieldprojects and three to five Green Fieldprojects with a total cost of Rs. 500crore to address the environmentalissues faced by the textile process-ing units. The scheme will providegovernment support for establishingcommon infrastructure to catalyseprivate sector investments in themajor processing clusters. Thescheme parameters envisage Gov-ernment support limited to 50% of theproject cost with ceiling limit of Rs.75crore.
The projects under the scheme wouldcover the following :
Group A – Water treatment & efflu-ent treatment plant and technology (in-cluding marine, Riverine and ZLD).
Group B – Common infrastructure
such as captive power generationplants on technology preferably re-newable/green technology,
Group C – Common facilities suchas Testing Laboratories and R&D cen-ters.
Government of India grant will bemandatory for Group A only. The Gov-ernment of India grant shall not beused for procurement of Land. The landwill be purchased/arranged by theSPV. The cost of land will not be partof the total project cost.
The scheme would also be applicablefor Technology up-gradation and ca-pacity enhancement of the abovementioned facilities in existing TextileClusters.
The details of the facilities and incen-tives being offered to the projectsconsidered under this scheme are asunder :
The Special Purpose Vehicle shallfund the project through a mix of eq-uity from members of industry, grantsupport from Ministry of Textile / StateGovernment, and the loan from Banksand Financial Institutions. The Gov-ernment of India support under thescheme by the way of grant would belimited to 50% of the project cost, witha ceiling of Rs.75 crore for projectswith Zero Liquid Discharge Systemsand Rs.10 crore for projects with con-ventional treatment systems. Supportfor marine discharge projects wouldbe analyzed on a case to case basiswith a maximum ceiling of Rs.75crore.
The project cost shall be borne by theCenter, State, Beneficiary, Bank loanin the ratio of 50:25:15:10 respec-tively.
The information was given by the Min-ister of State in the Ministry of Tex-tiles Smt. Panabaaka Lakshmi in awritten reply in the Rajya Sabha.
Setting up of Warehouses inLatin America
The Export Promotion Council for
NCM-FEBRUARY 2014
NEWS BRIEFS
90
Handicrafts (EPCH) had submitted aproposal for setting up of Warehouse/Showroom in Uruguay with a fundingof Rs.56.50 crore over a period of sixyears under MAI/MDA scheme. Theproposal was recommended by Min-istry of Textiles to Department of Com-merce. The Department of Commercehas informed that the proposal couldnot be considered due to paucity ofallocated budget by Ministry of Fi-nance/Planning Commission.
The information was given by the Min-ister of State in the Ministry of Tex-tiles Smt. Panabaaka Lakshmi in theLok Sabha.
Handloom Clusters
The Government of India, Ministry ofTextiles, Office of the DevelopmentCommissioner for Handlooms hastaken up 613 handloom clusters, eachhaving 300-500 handlooms for their in-tegrated and holistic development invarious States under IntegratedHandlooms Development Scheme(IHDS) during XI Plan and 2012-13 &2013-14 (till December 2013). Be-sides, 20 clusters, each having about5000 handlooms have been taken up.
Further, 6 mega handloom clusters,each having atleast 25000 handloomshave been taken up. In these clus-ters, financial assistance has beenextended to benefit the weavers to-wards various inputs like marginmoney, new looms and accessories,skill up-gradation, design develop-ment, corpus fund for yarn supply, up-gradation of handlooms, setting up ofCommon Facility Centre/Dye house,marketing, construction of Workshedsetc.
A new Scheme “ComprehensiveHandlooms Development Scheme(CHDS)” has been recently intro-duced, which provides for taking upnew clusters, each having 200-500handlooms and 2000-5000 handloomsto be developed in a time period of 4years. The scheme has several com-ponents and therefore, based on thereceipt of viable proposals and avail-ability of funds, financial assistance
Table 1 : Statement showing State-wise funds released and benefi-ciaries covered in Clusters taken up so far
S. Name of the State Amount released No. of BeneficiariesNo. (Rs.in lakh) covered
1 Andhra Pradesh 925.58 5415
2 Bihar 283.23 369
3 Chhattisgarh 232.19 739
4 Delhi 16.83 0
5 Gujarat 24.94 0
6 Haryana 17.25 332
7 Himachal Pradesh 199.61 1397
8 Jammu & Kashmir 329.67 1250
9 Jharkhand 1014.53 3107
10 Karnataka 626.62 4792
11 Kerala 662.72 0
12 Madhya Pradesh 347.58 635
13 Maharashtra 111.00 2515
14 Orissa 1047.36 2073
15 Punjab 0.00 0
16 Rajasthan 83.42 1118
17 Tamilnadu 1420.11 3777
18 Uttar Pradesh 1184.62 2343
19 Uttarakhand 306.55 1322
20 West Bengal 962.47 1752
Total 9796.27 32936
NER
1 Arunachal Pradesh 546.38 2500
2 Assam 1223.66 11663
3 Manipur 1932.84 15276
4 Meghalaya 267.94 620
5 Mizoram 76.75 371
6 Nagaland 1288.46 6000
7 Sikkim 0.00 0
8 Tripura 525.23 2077
Total 5861.26 38507
Grand Total 15657.53 71443
NCM-FEBRUARY 2014
NEWS BRIEFS
91
is released to the Implementing Agen-cies through the State Governmentconcerned. A statement showingState-wise funds released and num-ber of weavers benefited during thelast 3 years and current year (uptoJanuary 2014) is given in the Table 1.
Handloom clusters have been takenup in different years of XI Plan andcurrent Plan, of which some havebeen fully implemented while remain-ing are in different stages of imple-mentation. Independent evaluation ofthe Cluster Development Programmeshas revealed positive outcomes interms of increase in productivity, in-crease in income, increase in num-ber of working days etc.
Welfare of Textile Workers
Handloom weavers face hardships/constraints primarily due to stiff com-petition from powerloom& mill sector,low productivity, limited scope fortechnological up gradation, inadequatecredit availability at reasonable rateof interest and marketing facilities.However, various schemes viz. Inte-grated Handloom DevelopmentScheme (IHDS), Marketing and Ex-port Promotion Scheme (MEPS),Handloom Weavers ComprehensiveWelfare Scheme, Mill Gate PriceScheme (MGPS), DiversifiedHandloom Development Scheme(DHDS) and Revival Reform and Re-structuring Package (RRR) are beingimplemented for the welfare ofhandloom weaves and their conditionis improving.
Powerloom weavers also face hard-ships due to technological obsoles-cence, lack of continuous power sup-ply, inadequate credit flow at reason-able rate of interest, shortage ofskilled manpower etc. Out of 23 lakhpowerlooms in the country, only 1.15lakh looms are shuttleless looms. Inorder to improve the technology levelof the powerloom sector, TechnologyUpgradation Fund Scheme is imple-mented with more focus onpowerloom sector. Besides, various
other schemes, such as, Group In-surance Scheme (GIS), GroupWorkshed Scheme (GWS) etc., arebeing implemented for the welfare ofthe powerloom weavers/ entrepreneursin the entire country and their condi-tion is improving.
The Government is providing financialassistance to powerloom weavers in-cluding minority community engagedin Textile Industry including backwardregions of various parts of the coun-try including Uttar Pradesh in the fol-lowing forms:
Of the total premium of Rs. 470/- perweaver for Group Insurance Scheme,Rs. 290 are borne by Government ofIndia and Rs. 100/- paid from the So-cial Welfare Fund. The contribution ofpowerloomwaever/worker is Rs. 80/-only for one year. Subsidy is providedto powerloom weavers for construc-tion of loom-shed under the GroupWorkshed Scheme.
Rate of subsidy has now been in-creased to Rs. 300/- per sq. foot asagainst Rs. 160/- per sq. ft.
Re-imbursement of actual to & frotrain fare in sleeper class plus inci-dental expenses of Rs. 2000 perweaver is provided by the Governmentfor exposure visit of powerloomweaver from his cluster to the placeof developed powerloom cluster. Dur-ing the past 6 years, 29977powerloom weavers were taken todeveloped powerloom clusters andRs. 74 lakh was paid towards inciden-tal expenses.
Financial assistance is provided bythe Government for conducting Buyer-Seller Meets (BSM) for marketingtheir products under a common plat-form thereby eliminating middlemenand establishing direct business net-work with the buyers. Scale of assis-tance ranges from Rs.5 lakh to Rs.15lakh for 5 days per event dependingupon the class of cities. During thepast 7 years, 69 Buyer Selleer Meetswere conducted for which GOI re-leased Rs. 4.88 crore.
Powerloom weavers/entrepreneurs aregiven increased benefits Under Tech-nology Upgradation Fund Scheme. Theinterest subsidy has been raised from5% to 6 % and Capital subsidy hasbeen increased from 10% to 15% inthe 12th Plan. Margin Money Schemefor powerlooms under MSME sectorhas also been increased from 20% to30%. More than Rs. 409 crore hasbeen released as subsidy to smallpwerloom weavers/entrepreneurs un-der Technology Upgradation FundScheme.
New Schemes are also launched fromthis year for welfare of the powerloomweavers/entrepreneurs for implemen-tation during the 12th Plan period. ThisincludeHelath Insurance Scheme forpowerloom weavers, Insitu-Upgradation of plain powerlooms,Hire-purchase for powerlooms weav-ers/entrepreneurs, Yarn Bank Shceme,Common Facility Centre and Tex-Ven-ture Capital Fund.
Budget provision for all ongoingpowerloom sector schemes has beenincreased substantially for the 12thplan period. As against Rs. 66.51 crorefor allocated for the 11th plan period,the plan outlay for the 12th Plan pe-riod is Rs. 335 crore for the powerloomsector Schemes.
In so far as handloom sector is con-cerned, various schemes viz. Inte-grated Handloom DevelopmentScheme (IHDS), Marketing and Ex-port Promotion Scheme (MEPS),Handloom Weavers ComprehensiveWelfare Scheme, Mill Gate PriceScheme (MGPS), DiversifiedHandloom Development Scheme(DHDS) and Revival Reform and Re-structuring Package (RRR) are beingimplemented for the welfare ofhandloom weaves including minoritycommunity. Financial assistance un-der Integrated Handlooms Develop-ment Scheme (IHDS) and Marketingand Export Promotion Scheme(MEPS) is released to the StatesGovernments including UttarPradesh, while funds under other
NCM-FEBRUARY 2014
NEWS BRIEFS
92
schemes are released to the identi-fied implementing agencies to passon the benefits to the handloom weav-ers.
At present there is no proposal to con-trol the yarn prices and to mark theexact price on the packets of cottonyarn. The prices of yarn are determinedby the market forces
Identity Cards to Handloom/Handicraft Workers
State-wise number of artisans, as per1995-96 census is as per the Table 2.
Table 3 : State-wise total no. of handloomand allied workers
27 Andaman & Nicobar 1,09028 Chandigarh 43029 D. & Nagar Havel 11130 Daman & Diu 27831 Lakshadweep 12632 Pondecherry 1,832
All India 4,761,186
However based on enumeration un-dertaken till now, the number of handi-crafts artisans in the country during2011-12 is estimated to be 68.86lakhs. The number of handloom weav-ers as per All India Handloom Cen-sus (2009-10), State-wise, is as perTable 3.The Government is imple-menting the Schemes of Human Re-source Development and Design andTechnology Upgradation under whichHandicraft artisans are being providedtraining. For handloom weavers train-ing is provided under IntegratedHandloom Development Scheme(IHDS), now comprehensive
UjalaHathkargha Silk Coop. SocietyLtd., Mau, and M/s Raj Kargha SilkCoop. Society Ltd., Azamgarh and oneperson Shri Shakil Ahmad S/o ShriMohd.Yasin from Mirzapur were blacklisted in September, 2013 for twoyears, for using fake identity cards forparticipation in Dilli Haat, INA, NewDelhi.
FDI in Textiles Sector
The details of Foreign Direct Invest-ment (FDI) in textiles sector during theApril 2010 to June, 2013 is given inTable 4. The State/UT-wise details arenot compiled.No study has been con-ducted in this regard. However, theimpact of FDI on the overall develop-ment of the sector is felt by way oftechnical knowhow, new products indomestic market and increase in ex-ports. Various labour laws ensure that
Handloom DevelopmentScheme (CHDS) and Inte-grated Skill DevelopmentScheme (ISDS).
Two societies viz., M/sthe interest of work-ers including thoseengaged in textilesector is protected.
Developmentof Pochampa-lli HandloomPark
The project, M/s.P o c h a m p a l l iHandloom Park,Andhra Pardeshwas sanctioned inMay,2008 with aproject cost ofRs.34.00 crore andGOI grant ofRs.13.60 crore. Thetotal GOI grant hasbeen released andthe project is com-pleted. The last in-stallment was re-leased on 7th Janu-ary, 2011.
The informationwas given by theMinister of State inthe Ministry of Tex-tiles in the RajyaSabha.
NCM-FEBRUARY 2014
NEWS BRIEFS
93
Problems Being Faced By Textile Industry
There has been overall growth in the textiles sector as the quan-tum of production and export of major textile items showed anupward trend during the last 2 years and current year.The de-tails are given in Tables 5 and 6.
In order to promote growth in the textile sector, Governmenthas launched various policy initiatives and schemesvizTechnology Upgradation Fund Scheme (TUFS), Scheme forIntegrated Textile Parks (SITP) and Integrated Skill Develop-ment Scheme (ISDS). The schemes will accelerate manufac-turing sector which inturn will help in employment generation.
Functioning of textile industries in Maharashtra
Table 4 : Foreign Direct Investment (FDI)in textiles sector
(Amount in Billion)
Financial Year Total (All Sector)
In Rs. In US$
2010-11 885.20 19.43
2011-12 1739.46 36.50
2012-13 (Apr-Jun) 238.20 4.43
Source : Department of Industrial Policy & Promo-tion, Ministry of Commerce and Industry, Govt. ofIndia.
National Textile Corporation (NTC) hada total of 35 sick mills taken over fromprivate entrepreneurs under variouslegislations in the state ofMaharashtra. Due to the continuousloses and erosion of its net worththese mills were referred to Board ofIndustrial Financial Reconstruction(BIFR). Now NTC is implementingBIFR approved revival scheme, un-der which 5 mills have been revivedby NTC which is financed throughsale of surplus assets of NTC. 5 millsare managed through joint ventureroute (Table 7). The list of remainingclosed mills are at (Table 8).
The detail of land & machinery of Tex-tile Industries sold in the state ofMaharashtra during last ten years is
Table 6 : Export Of Major Textile Items (Chapter Heading 50 to 63)
Fabrics (---) NA 2224797 NA 2311408 NA 1345672 NA 1610456
RMG (---) NA 6573855 NA 7052201 NA 3902836 NA 4927377
Madeups (---) NA 1893043 NA 2197994 NA 1290678 NA 1515917
Other Textiles (---) NA 817593 NA 1049371 NA 589413 NA 726340
Total (---) NA 16551463 NA 17998671 NA 9600203 NA 11679712
as under :(Rs. in Cr)
Plant & Machinery 145.85
Land 4939.33
Total 5085.18
Revival of NTC Mills
Due to obsolete technology, excessmanpower and poor productivity, Na-tional Textile Corporation (NTC) wasreferred to Board for Industrial andFinancial Reconstruction (BIFR). Now
NCM-FEBRUARY 2014
NEWS BRIEFS
94
NTC is implementing a revivalScheme approved by BIFR, underwhich, 78 mills have been closeddown (Table 9) and 24 mills are to berevived, out of which 23 are function-ing and one mill is stated to be set upas technical textile unit in Rajasthan.
Some of the officials/employees/labourers are still availing the accom-modation facility of closed mills ofNTC as per local arrangements by themill managements. Government hasnot taken any decision so far to pro-vide them ownership.
TABLE 7 : DISTRICT-WISE MAHARASHTRA STATE MILLS REVIVEDBY NTC
SR. NAME OF THE MILLS DISTRICT AMOUNTNO. (RS. CR.)
1 PODAR MILLS MUMBAI MUMBAI 39.96
2 TATA MILLS MUMBAI MUMBAI 80.87
3 INDIA UNITED M ILL NO.5 MUMBAI MUMBAI 31.44
4 BARSHI TEXTILE MILLS BARSHI SHOLAPUR 24.67
5 FINLAY MILLS ACHALPUR AMRAVATI 254.66
TOTAL 431.60
DISTRICT WISE MAHARASHTRA STATE MILLS REVIVED THROUGH J.V. ROUTE
1 INDIA UNITED MILLS NO.1 MUMBAI MUMBAI
2 APOLLO TEXTILE MILLS MUMBAI MUMBAI
3 GOLDMOHUR MILLS MUMBAI MUMBAI
4 NEW CITY OF BOMBAY MFG. MILLS MUMBAI MUMBAI
5 AURANGABAD TEXTILE MILLS AURANGABAD AURANGABAD
TABLE 8 : DISTRICT-WISE NTC MILLSOF MAHARASHTRA CLOSED UNDER ID ACT
S. NAME OF THE MILLS DISTRICTNO.
1 INDIA UNITED MILLS NO.2 MUMBAI MUMBAI
2 INDIA UNITED MILLS NO.3 MUMBAI MUMBAI
3 INDIA UNITED MILLS NO.4 MUMBAI MUMBAI
4 KOHINOOR MILLS NO.2 MUMBAI MUMBAI
5 KOHINOOR MILLS NO.3 MUMBAI MUMBAI
6 JAM MFG. MILLS MUMBAI MUMBAI
7 MODEL MILLS NAGPUR NAGPUR
8 R.S.R.G. MILLS AKOLA AKOLA
9 SHRI SITARAM MILLS MUMBAI MUMBAI
10 VIDHARBHA MILLS ACHALPUR AMRAVATI
11 BHARAT TEXTILE MILLS MUMBAI MUMBAI
12 DIGV IJAY TEXTILE MILLS MUMBAI MUMBAI
13 ELPHINSTONE SPG & WVG MILLS MUMBAI MUMBAI
14 JUPITER TEXTILE MILLS MUMBAI MUMBAI
15 MUMBAI TEXTILE MILLS MUMBAI MUMBAI
16 NEW HIND TEXTILE MILLS MUMBAI MUMBAI
17 PODAR PROCESSORS MUMBAI MUMBAI
18 SHREE MADHUSUDAN MILLS MUMBAI MUMBAI
19 INDIA UNITED MILLS NO.6 (DYE WORKS) MUMBAI MUMBAI
20 KOHINOOR MILLS NO.1 MUMBAI MUMBAI
Trade unions urge Centreto help Anglo French Tex-tiles running
The All Trade Unions Action Commit-tee of Anglo French Textiles has urgedthe territorial administration to take steps to pro-vide order for manufacturing uniforms to AFT Mill.
A decision to that effect was taken at a meetingheld in Puducherry recently. While thanking theChief Minister N. Rangasamy and the mill man-agement for restarting the mill as per the promisemade to the unions, the Committee said that thegovernment had already placed order for makinguniforms for school going children.
Similarly, it should ask the police, jail, hospitaland other administrations to place order for mak-ing uniforms to the AFT Mill so as to ensure mar-keting of AFT products. It would enable it to getadvance money from the concerned departmentsfor quick liquidation.
Reiterating the demand for providing Rs. 500 croreto the AFT Mill for its total rehabilitation, anotherresolution said the Central government must takespeedy steps on the proposal. The age old millcouldn’t be allowed to sink. Sincere steps mustbe taken to consider the proposal.
Similarly, the Central government should act im-mediately on the memorandum of territorial ad-ministration, seeking permission to enable the AFTMill management to sell its land at Pattanur tocarry out interim measures to ensure the smoothrunning of the mill.
"Your ability to be a winner 100% of the time is based upon giving up the notion that losing at anything is equivalent to being a loser."- Dr. Wayne W. Dyer
NCM-FEBRUARY 2014
NEWS BRIEFS
95
TABLE 8 : DISTRICT-WISE NTC MILLSOF MAHARASHTRA CLOSED UNDER ID ACT
S. NAME OF THE MILLS DISTRICTNO.
1 INDIA UNITED MILLS NO.2 MUMBAI MUMBAI
2 INDIA UNITED MILLS NO.3 MUMBAI MUMBAI
3 INDIA UNITED MILLS NO.4 MUMBAI MUMBAI
4 KOHINOOR MILLS NO.2 MUMBAI MUMBAI
5 KOHINOOR MILLS NO.3 MUMBAI MUMBAI
6 JAM MFG. MILLS MUMBAI MUMBAI
7 MODEL MILLS NAGPUR NAGPUR
8 R.S.R.G. MILLS AKOLA AKOLA
9 SHRI SITARAM MILLS MUMBAI MUMBAI
10 VIDHARBHA MILLS ACHALPUR AMRAVATI
11 BHARAT TEXTILE MILLS MUMBAI MUMBAI
12 DIGV IJAY TEXTILE MILLS MUMBAI MUMBAI
13 ELPHINSTONE SPG & WVG MILLS MUMBAI MUMBAI
14 JUPITER TEXTILE MILLS MUMBAI MUMBAI
15 MUMBAI TEXTILE MILLS MUMBAI MUMBAI
16 NEW HIND TEXTILE MILLS MUMBAI MUMBAI
17 PODAR PROCESSORS MUMBAI MUMBAI
18 SHREE MADHUSUDAN MILLS MUMBAI MUMBAI
19 INDIA UNITED MILLS NO.6 (DYE WORKS) MUMBAI MUMBAI
20 KOHINOOR MILLS NO.1 MUMBAI MUMBAI
DISTRICT- WISE NTC MILLS OF MAHARASHTRA STATE FOR WHOMM.O.U. SIGNED FOR J.V. CANCELLED ARBITATOR APPOINTED MAT-TER SUB-JUDICE
SR. MILL DISTRICTNO.
21 RBBA MILLS HINGANGHAT HINGANGHAT
22 SAVATRAM RAMPRASAD MILLS AKOLA AKOLA
23 CHALISGAON TEXTILE MILLS CHALISGAON CHALISGAON
24 DHULE TEXTILE MILLS DHULE DHULE
25 NANDED TEXTILE MILLS NANDED NANDED
TN Millowners have no plans toinvest in any other State, saysSIMA chief
Coimbatore : Textile industry in Tamil Nadu is notlooking to invest elsewhere, The Southern IndiaMills’ Association (SIMA) chief T Rajkumar said.
The Chairman of the apex body of textile mills inthe South said that the industrial climate in TamilNadu ranked on the top in many ways.
Though he maintained that the call for the meethad nothing to do with the expression of interestgiven by industry bodies here to the KarnatakaChief Minister Siddaramaiah during the recentvisit to this region (to lure investors to considerinvesting in the neighbouring State), his asser-tion that it would be impossible for the textileindustry to invest in Chamrajnagar, seemed tosuggest otherwise.
Industry-friendly policy
“The State, despite its dependence on cotton fromupcountry markets, accounts for 47 per cent ofyarn production. An industry-friendly textile policywould attract new investments in modernisationand green-field projects,” he said.
He did not deny the lull in investment climate inthe past three years. Acute power shortage ag-gravated the industrial climate, resulting in newinvestments coming to a standstill for the lastfive years. Investments were further delayed dueto the delay in announcing the new TechnologyUpgradation Fund Scheme for the 12th Plan Pe-riod, he said in reply to a question.
Investments
The sector, however, is fully geared for new in-vestments and it is estimated that the industrymight invest over Rs.1.5 lakh crore over the nextfour years. The Tamil Nadu Government’s assur-ance about taking adequate steps to make theState’s textile policy more attractive to enhancecompetitiveness of the sector would take careof all the needs of the industry, he said, adding,“the SIMA delegation met the Chief Minister JJayalalithaa and assured that we have no plansto invest in any other State.”
Though the State is facing certain challenges onraw material front and power in the short run, thepowers that be are addressing such issues on awar footing, he added.
TN to launch Rs.50-crore cotton mission
The government will launch a Rs.50-crore Tamil Nadu Cotton Culti-vation Mission to boost the cotton production in the State, saidFinance Minister O. Panneerselvam in his budget speech recently.
The Minister said cotton was cultivated on 3.34 lakh acres with aproduction of four lakh bales. But all the 1,948 spinning mills in theState required 110 lakh bales per year.
Under the mission, at least 3.70 lakh acres will be brought undercotton cultivation in 2014-15 and ultimately the cultivation will be
NCM-FEBRUARY 2014
NEWS BRIEFS
96
TABLE 9 : LIST OF 78 MILLS CLOSED UNDER I.D. ACT
Sr. NAME OF THE MILLS LOCATION REASONS OFNo. CLOSURE
28 INDIA UNITED MILLS NO.2 Mumbai Unviable29 INDIA UNITED MILLS NO.3 Mumbai Unviable30 INDIA UNITED MILLS NO.4 Mumbai Unviable31 KOHINOOR MILLS NO.2 Mumbai Unviable32 KOHINOOR MILLS NO.3 Mumbai Unviable33 JAM MFG. MILLS Mumbai Unviable34 MODEL MILLS Nagpur Unviable35 R.S.R.G. MILLS Akola Unviable36 SHRI SITARAM MILLS Mumbai Unviable37 VIDHARBHA MILLS Achalpur Unviable38 BHARAT TEXTILE MILLS Mumbai Unviable39 DIGV IJAY TEXTILE MILLS Mumbai Unviable40 ELPHINSTONE SPG & WVG MILLS Mumbai Unviable41 JUPITER TEXTILE MILLS Mumbai Unviable42 MUMBAI TEXTILE MILLS Mumbai Unviable43 NEW HIND TEXTILE MILLS Mumbai Unviable44 PODAR PROCESSORS Mumbai Unviable45 SHREE MADHUSUDAN MILLS Mumbai Unviable46 INDIA UNITED MILLS NO.6 (Dye Works) Mumbai En-mass MVRS47 KOHINOOR MILLS NO.1 Mumbai En-mass MVRS48 FINLAY MILLS Mumbai Relocated@Achalpur
SIMA welcomes restora-tion of export incentivefor cotton yarn
Southern India Mills’ Association
expanded to 6 lakh acres in the nextfive years.
He said as part of the government’sefforts to improve on-farm productiv-ity and farmer’s income, various sub-projects would be taken up under theNational Agriculture DevelopmentProgramme (NADP) at a cost of Rs.323 crore.
Moreover, the crop loan target for theco-operatives would be enhanced toan unprecedented level of Rs. 5,000crore. The allocation for crop insurancewas Rs 242.54 crore. Earlier, the DMKand its allies staged a walkout fromthe House alleging that the time oftabling the budget was changed with-out consulting them.
The Southern India Mills’ Association(SIMA), welcoming the announce-ment, said it would enable the Stateto be self-sufficient in cotton.
The SIMA chairman, T. Rajkumar, saidthat textile mills in the State neededover 100 lakh bales a year. However,just five lakh bales of cotton were pro-duced and the mills procured the restfrom other States. The mills were pay-ing high freight costs to transport cot-ton from other States.
T Rajkumar (SIMA Chairman)
NCM-FEBRUARY 2014
NEWS BRIEFS
97
(SIMA) Chairman, T Rajkumar hashailed the Centre’s decision in restor-ing the incremental exportincentivisation scheme for cotton yarnand appealed to restore Focus Mar-ket Scheme also.
In a recent press release, he thankedthe Union Commerce Ministry andsaid : "The restoration of exportincentivisation scheme, due to theproactive measures taken by theUnion Textile minister, would motivatethe yarn exporters to recapture themarket.
Mr. Rajkumar also appealed the Cen-tre to restore the FMS for cotton yarn,
particularly for the Countries like LatinAmerica and CIS Countries, as Indiacannot fully depend on China, whichis the major importer of Indian Cottonyarn.
FMS is essential to offset the highfreight rate for such countries. Sign-ing of GSP Plus (Generalised Sys-tem of Preference) agreement by Pa-kistan really posed a challenge to In-dia, as Pakistan is gaining 9. 6 percent advantage due to duty free ac-cess to EU countries, he said.
Mr. Rajkumar asked the Centre toannounce suitable interest subvention(three to 5 per cent) at the earliest,
which would enable the Indian export-ers to compete with Pakisan to a cer-tain extent and sustain the competi-tiveness.
Textiles Minister seeksduty-free access to theEUIndia is seeking duty-free access forits garments and textiles into the Eu-ropean Union, in line with what is onoffer to competing countries such asPakistan and Bangladesh. The TextilesMinistry is already in talks with Ger-many and the UK for zero duty ac-
NCM-FEBRUARY 2014
NEWS BRIEFS
98
cess for garments and some other tex-tile items, according to Textiles Min-ister KS Rao.
“We are negotiating Government-to-Government. We want them (EU coun-tries) to give us the same dispensa-tion as Pakistan and Bangladesh,” theMinister said. It is important to ensurea level-playing field for Indian export-ers. The Ministry has also asked theFinance Ministry for an interest ratesubvention (lower interest rate) of 3-4per cent for textile exporters. “This willhelp them compete in the export mar-ket better and exports would go up,”Rao said.
Preferences scheme
The Minister said that the Textile Min-istry would set an ambitious exporttarget of $60 billion for the textiles sec-tor for the coming fiscal, which is al-most 50 per cent higher than exportsof $41 billion estimated this year.
But the fact that the country hasgraduated out of the Generalised Sys-tem of Preferences (GSP) scheme of-fered by the EU under which it wasgetting preferential access to the Eu-ropean market (by paying lower im-port duties) could make the goingtough. EU is India’s largest market fortextiles.
While Bangladesh and Sri Lanka havebeen taking advantage of a duty-freeregime for their textile items for sometime, Pakistan too has been made eli-gible for zero-duty access since Janu-ary this year under the EU’s GSP Plusscheme. Rao said that Indian gar-ments and textiles were getting af-fected because of the double blow.
“In a market like Germany, while Pa-kistan does not have to pay any du-ties for readymade garments, Indianexporters are subject to a duty of 9.36per cent,” the Minister said.
As per estimates made by the Paki-stani Government, the textile indus-try would earn additional profits of $930million per year because of the GSPPlus scheme. Under the GSP Plusscheme, Pakistan is allowed to ex-
LIST OF 78 MILLS CLOSED UNDER I.D. ACT (Contd. from last page....)
Sr. NAME OF THE MILLS LOCATION REASONS OFNo. CLOSURE
port textile goods to the 27-member EU duty free till 2017.
With Chinese textiles becoming uncompetitive due to rising labour cost andBangladeshi textiles facing quality issues, India is hopeful that several Euro-pean countries will take the country's request seriously.
“EU imports 95 per cent of its textile requirements. It is giving concessions toPakistan and Bangladesh for political reasons. We are requesting the same,”Rao pointed out.
Non-operating Textile units in Punjab up by 35%
Chandigarh : Clocking a compounded annual growth rate (CAGR) of around35%, the number of non-operating textile units in Punjab grew from 11 to 227units during the 2000-01 and 2010-11 period, as per an Assocham study.
"The number of jobs lost due to the non-operation of textile units in Punjab
NCM-FEBRUARY 2014
NEWS BRIEFS
99
have grown at a CAGR of about 41% during the afore-said period as the state has suffered loss of over 32,600jobs as of 2010-11 as against over 1,000 in 2000-01,"according to the study titled 'State-wise assessment oftextile sector & recommendations,' conducted byAssocham.
Similarly, in Haryana, non-operating textile units grewfrom 11 to 175 during the aforesaid period thereby clock-ing a CAGR of about 32%. The state suffered a loss of14,300 jobs as of 2010-11 as against 675 jobs lost asof 2000-01, the study highlighted.
The number of jobs lost due to the non-operation oftextile units in Haryana grew at about 36%, it added."The total number of textile factories in Punjab increasedfrom 635 to 929 during the aforesaid period. However,the number of units in operation increased from 624 tojust 702," the study said. "While in Haryana, the total
DS Rawat (Secretary-General,Assocham)
number of textile factories increased from 455 to 630, the number of textilefactories in operation increased from 444 to 455."
The number of people employed in the textile units under operation in Punjabincreased from 58,804 to over 1,00,857 during the abovesaid period, while inHaryana the number of people employed in textile units increased from 27,238to 37,228 during the said period.
"Low productivity, lack of advanced manufacturing technologies, lack of for-eign investments, supply chain bottlenecks, lack of economies of scale, labour-related challenges, issues arising due to a fragmented industry and weakbrand positioning are certain key reasons for the non-operation of textile units,"said DS Rawat, national secretary-general, Assocham.
"Technology and skill upgradation, inflow of foreign investments, partnershipwith international labels, brand promotion and flexible labour policy are cer-tain key suggestions listed by our study to make the textile industry finan-cially viable to minimize the share of non-operational factories."
NCM-FEBRUARY 2014
NEWS BRIEFS
100
Textile Industry faces cri-sis in Amritsar -Jalandhar - LudhianaThe government has announced mea-sures to attract industrial investmentbut the state’s existing industry inAmritsar, Jalandhar and Ludhiana isin doldrums.
The centuries-old textile industry inAmritsar is struggling for survival,grappling with labour scarcity, hightaxes and high power rates. It has anannual turnover of over Rs 1,000 cr,half of it coming from the shawl in-dustry alone.
There are two mega units - OCM, es-tablished during the British rule andnow owned by a US-based privateequity fund named WL Ross and Com-pany, and Swadeshi.
Data with the Punjab Industries De-partment shows there are 856 regis-tered textile units in the city. However,there is no exact information on thenumber of employees in these units.Also, there are hundreds of unregis-tered handlooms. These are of threekinds — powerloom, automatic andshuttle-less Rapier — with electronicjacquards.
PL Seth, a textile unit operator, saidthe government’s indifference could begauged from the fact that no textilepolicy had been chalked out after2006. He said after agriculture, textilewas the most labour-intensive sectoroffering jobs to a large number ofpeople. “The government is givingpower subsidy to the tune of aboutRs 7,000 crore to farmers. A mere 10per cent of this amount could do won-ders to bolster the textile sector in theborder district,” he claimed.
Labour unions say that more than5,000 weavers are working in this sec-tor. Labour leader Amarjeet SinghAssal complained of unhygienic work-ing conditions and long working hours.With Punjabi youth reluctant to workin factories and labour from UP andBihar only a trickle, the units are fac-ing a severe labour shortage.
A large number of small and medium
category units have shifted to thecomputerised rapier shuttle-lesslooms. But there are few hands tooperate and mend these looms. Thesecomputer-operated looms weave yarnlike cotton, polyester, silk and nylon.But big units have turned to the state-of-the-art dobby shuttle-less looms.
The state government’s plan to up-grade curriculum in ITIs with the as-sistance of a German firm is still totake off. The Punjab Institute of Tex-tile Technology, the only one of its kindin Punjab, Haryana, HimachalPradesh and Jammu and Kashmir,has failed to deliver, says textile in-dustrialist Kamal Dalmia.
Dyeing and finishing units, spinningmills, 4,500 modern embroidery ma-chines and 400 shuttle-less Rapierlooms with electronic jacquards andcone dyeing and printing industrieslend ample support to the city's tex-tile industry. Rough estimates suggestthat textile goods, such as high-qual-ity tweed, shawls and stoles, worthRs 200 crore are sold to countries allover the world.
Textile industrialist Bhupinder Khoslasays that VAT on yarn within the stateis 6.05 per cent while the CST on thesame from outside the state is 2 percent. As a result, manufacturers andtraders pass on the high input cost tothe retailers. Also, the high VAT pre-vents the dealers from getting regis-tered, which affects tax collection. Hesays the VAT on yarn must be broughtdown to 2 per cent to bring it on a parwith VAT on cotton and paper. "Thismove can revive allied textile indus-tries like spinning and weaving," hesuggested.
Liquidity crunch
SK Wadhwa, who manufatures blan-kets, said the textile industry in thecountry was going through a toughperiod and needed Rs 11,000-croreliquidity for restructuring. As of now,industrialists were getting term loan(advance given for setting up indus-try) and loan on the working capital atan interest of 13 to 14 per cent perannum. "Extremely high rates of in-terest make it unviable to invest inthe textile business," he explained.
Though the government has increasedcapital subsidy from 20 to 30 per centon Rapier shuttle-less looms, thesteep rise in the US dollar and Eurorates has neutralised the effect.Hence, the government needs to re-duce import duty to f 5 per cent fromthe existing 17.45 per cent, say manu-facturers. "This will also help convert20 lakh manual looms to shuttle-lesslooms as per the Ministry of Textileplan chalked out last year," they say.
The shawl industry being the main-stay of the textile sector, the chant toannounce Amritsar as a city of shawlsis growing louder, especially asAmritsar-manufactured shawls aresold as “Kashmiri shawls” in the restof the country. PL Seth, whose familyis one of the oldest players in the in-dustry, said only enterprising indus-tries with adequate liquidity could capi-talise on the subsidy extended by theUnion Government. He said the tex-tile industry, the oldest in the city, hadgot no help from any political party. "
Like other existing industries in thestate, we are dismayed with the newindustrial policy that has nothing tooffer." Amritsar-based Shawl Club ofIndia (SCI) has requested the stategovernment to take steps to revivethe centuries-old textile Industrythrough the ensuing Budget of 2014-15. Piara Lal Seth, SCI general sec-retary, SCI, appreciated thegovernment’s move to turn Punjabinto a power surplus state. But, thelabour-intensive textile industryneeded rebate from high power taxes.In a letter to the Chief Minister, hesaid, “power rates of the textile indus-try are highest in comparison to otherstates in the country.”
Recently Delhi, Haryana andMaharashtra reduced their powerrates. As a result, the indigenous tex-tile industry here was not in a posi-tion to compete with manufacturingunits operational in these states. Inlight of these facts there was a needto reduce power rates to the tune of30 to 40 per cent to make it industryfriendly so that existing entrepreneursand new entrepreneurs may take ini-tiative for expansion of their existingunits and investment for new units.
