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Textile industry records spurt in investment in last four years
24
Dec '08
The Indian Textiles Industry has an overwhelming presence in the economic life of the country. Apart from providing one of the basic necessities of life, the textiles industry also plays a pivotal role through its contribution to industrial output, employment generation and the export earnings of the country.

Currently, it contributes about 14 percent to industrial production, 4 percent to the GDP, and 13.50 percent to the country's export earnings. It provides direct employment to over 35 million people, which includes a substantial number of SC/ST, and women. The Textiles sector is the second largest provider of employment after agriculture. Thus, the growth and all round development of this industry has a direct bearing on the improvement of the economy of the nation.

Due to policy measures initiated by the Government in the recent past, the Indian textiles industry is in a stronger position than it was in the last six decades.The industry which was growing at 3-4 percent during the last six decades has now accelerated to an annual growth rate of 16 percent in value terms and will reach a level of US $ 115 billion (exports US $ 55 billion; domestic market US $ 60 billion) by 2012, from US$ 52 billion in 2007-08.

The catalyst for this exponential growth is a buoyant domestic economy, substantial increase in cotton production, a conductive policy environment provided by the Government, and the end of the Multi Fibre Arrangement (MFA), on December 31, 2004. The rationalization of fiscal duties undertaken during the last four years, has also provided a level playing field in all segments of the industry, resulting in the holistic growth of the industry. A strong foundation for industry has been laid on which world class manufacturing units can realize their full potential and make a mark in the international economy.

The growth manifests through a consistent increase in production of fabric, per capita availability of cloth and investments. During 2007-08, the total production of fabric was 57 billion sq mtrs, compared to 53 billion sq mtrs in 2006-07 and 50 billion sq mtrs in 2005-06. During 2006-07, the per capita availability of cloth was 39.60 sq mtrs, compared to 36.10 sq mtrs in 2005-06 and 33.10 sq mtrs in 2004-05.

The textiles sector has witnessed a spurt in investment during the last four years, increasing from Rs. 7,941 crore in 2004-05 to Rs. 16,194 crore in 2005-06, to Rs. 61,063 crore in 2006-07, and to Rs. 19,308 crore in 2007-08. The investment between 2004-08 was Rs. 1,04,506 crore and it is expected that investments will touch Rs. 1,50,600 crore by 2012. This enhanced investment will generate 17.37 million jobs (comprising 12.02 million direct and 5.35 million indirect jobs) by 2012.

The main engine of investment has been the Technology Upgradation Fund Scheme (TUFS). The increased investment will help to upgrade technology, strengthen infrastructural facilities at potential textiles growth areas, increase the installation of additional spindles and looms. Besides, it will provide a fillip to the garmenting, technical textiles and processing segments of textiles industry, which have a great potential for value addition and employment generation.

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