Apr '18
The state had extended share capital worth ₹1,806 crore to the mills. Of this ₹375 crore was due to be credited to the state by 2017 but only Rs 40 crore was credited, a top Indian daily reported citing the CAG document.
A test-check by CAG of 10 functional cooperative spinning mills found they had purchased 1,724 lakh kg of cotton during 2012-17 from within and outside the state without according priority to their own cotton grower members.
In defence, the state’s cooperative and textiles department said these mills did not have ginning facilities and hence, could not procure cotton from their own members.
Out of 280 cooperative spinning mills in the state, 130 receive financial assistance from the government. Of these, only 66 are functioning and only seven had made profits in the last five years.
The CAG report found a large number of the cooperative mills are located in non-cotton producing areas in violation of rules, which say 70 per cent of the cooperative spinning mills need to be in cotton-producing areas.
However, of the 130 mills receiving state assistance, Solapur hosted 40 per cent though it accounts for less than one per cent of the area under cotton.
The state government recovered barely any dues from the mills that were closed or liquidated. As many as 42 of the 130 cooperative spinning mills with a liability of ₹295 crore were closed, deregistered or had gone under liquidation, the report added. (DS)
Fibre2Fashion News Desk – India
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