FICCI comments on Draft Cotton Trade Bill 2012

It is FICCI’s view that certain clauses of the Bill need to be amended to ensure that industry can easily implement, monitor and follow the rules. The objective of the Bill should be to build a robust and an independent market intelligence system for statistics on cotton production and consumption which is important for the growth of the textile industry. In its representation, FICCI has said that the current form of the Bill emphasises regulation of the industry, rather than developing an independent system of data collection.

The Bill needs to strike a balance such that it does not become a means to regulate trade, emphasised FICCI.

The Bill places a heavy burden of compliance on stakeholders. Every ginning factory has to maintain registers as prescribed by the Textiles Commissioner and also other ginning registers under the Bill. Moreover, these have to be maintained for three years. Furthermore, monthly returns have to be submitted by cotton ginning factories and textile mills which will further add to the compliance burden on the industry.

The Bill also mandates that every owner or occupier of a cotton processing factory shall produce the Ginning or Press register for inspection whenever required to do so. Here, emphasis should be on self-certification rather than on inspection as proposed in the Bill, FICCI suggested.

The penalties proposed in the Bill are too harsh leading to two years of imprisonment in case of non-compliance. Also, Directors are held responsible for misreporting of data under the Bill. FICCI has suggested that these provisions need to be reviewed and less stringent penalties imposed. Directors of the company should not be held responsible for offences. Liability should be restricted to monetary penalties.

Commenting on the Bill further, FICCI said that it supports the concept of single agency for data collection of cotton. The current system of data collection is not web based. Also, the system proposed in the Bill does not seem to be e-based. The applications that need to be submitted should be e-based. Government may also consider developing a system of bar-codes with a unique electronic identifier at the ginning and pressing factories. The objective is to have real time data since outdated information will not be useful for the purpose of any policy decision.