Interview with Mr. Anand Sharma

Mr. Anand Sharma
Minister of Textiles and Commerce & Industry
Govt. of India

..the first objective is to increase the share of manufacturing in overall economy to at least 25% by 2022.

In 2010, the Indian economy rebounded robustly from the global financial crisis - largely because of strong domestic demand - and growth exceeded 8% year-on-year in real terms. With its ninth largest nominal GDP and the fourth largest purchasing power parity (PPP), the country's per capita GDP (PPP) stood $3,586 (IMF, 129th) in 2010. Industry accounts for 28% of the GDP and employs 14% of the total workforce. Textile manufacturing is the second largest source of employment after agriculture. During 2004 to 2008, the total investment amounted to 27 billion dollars. By 2012, still convinced of the government, this figure will reach 38 billion as expected. Ludhiana produces 90% of woolens in India and is known as the Manchester of India. Tirupur has gained universal recognition as the leading source of hosiery, knitted garments, casual wear and sportswear. The Ministry of Textiles steers the formulation of policy, planning, development, export promotion and regulation of the textile sector in India. This includes all natural, artificial, and cellulosic fibres that go into the making of textiles, clothing and handicrafts. Mr. Anand Sharma (Born 5 January 1953) is the present Union Minister of Textiles and Cabinet Minister for Commerce and Industry, Government of India. He was given the portfolio for Ministry of Textiles on July 12 2011. Mr. Sharma is currently member of upper House of the Parliament (Rajya Sabha). Addressing the Face2Face talk with Ms. Madhu Soni- Sr. Editor & Correspondent, Mr. Anand Sharma draws the closer picture of the Indian textile industry and shares the ministry’s plans to enhance the performance of this vital sector.

Face2Face feels pleasure to host an interview with you, Sir! You have assumed additional charge as hon’ble Union Minister of Textile in recent past; please apprise us about the immediate challenges figured out by your ministry.

Indian Textiles Industry is the India’s second largest employer sector after agriculture, employing 60 million textiles workers. The industry has witnessed rapid investments catalyzed by TUFS with Rs. 2.07 lac crores of project costs being approved since 1999. Textiles industry has just coped resiliently with the global economic recession and the highest price volatility in cotton prices in the past 150 years. There appears to be incipient signs of a slowdown in 2011-12 with yarn and fabric production coming down. However, I am confident that in a year of low raw material costs, textiles industry will weather the challenges of a slow down and register positive manufacturing growth.

So, what will be some of the key action areas in reform agenda to bring back the industry on high growth trail?

The level of ambition has to be high to begin with. We have a very robust policy framework that will be attractive to investors. We have to bear the larger objective in mind. The share of manufacturing in India has been stagnating, which is much higher in other countries such as China, South Korea, Thailand, Malaysia and Indonesia, where it is 25%-34%. Therefore, the first objective is to increase the share of manufacturing in overall economy to at least 25% by 2022.

Well, that means more opportunities for jobs. Am I right?

Definitely! There is a social dimension too, which is to create 100 million jobs. In a country of 1.2 billion people, manufacturing is the only sector that can create so much employment. The idea is to make Indian manufacturing globally competitive. The National Investment and Manufacturing Zones(NIMZ) that are planned are not just zones but standalone, integrated industrial townships that will be autonomous and self-governing under Article 243Q-C of the Constitution.

So, what role infrastructural development will play in these ambitious plans to growth?

In meeting the aspirations of our people to sustain double-digit growth over the next few decades, creation of world-class infrastructure would be of critical imperative. The coming decade will see expansion of our road and highway networks, building of new ports and airports and expansion of telecom and power sectors to provide sustenance to our growing economy. We aim to invest in excess of US$ 1 trillion over the next decade in creation of our infrastructure.

What level of support is available from various affiliated government bodies on the plan of actions proposed?

The recent interactions with the chambers of industry and their senior members have yielded considerable feedback on the initiatives already taken by the Government. A number of issues, including those relating to the implementation of the direct tax code, GST, National Manufacturing Policy, MMDR Act and so on, were discussed. A number of actionable points have emerged because of these discussions. We intend to continue the structured dialogue with the industry, including at the state level, and have such interactions more frequently. A decision has been taken to constitute an Industry-Government task force at the level of the Commerce & Industry Minister for ongoing interactions with industry. First meeting of the task force has already taken place.

TUFS is to be favored in upcoming 12th Plan too. Can you please share some details about it and how is it going to benefit the industry as a whole?

The restructured Technology Upgradation Funds Scheme (TUFS) is presently approved up to 31st March next year. The working group on Textiles and Jute for the 12th Five Year Plan has recommended continuation of the Scheme during the 12th five year plan given the positive benefits of the Scheme and the continued need for modernization, especially in the hitherto unaddressed areas of weaving, processing, etc. with a projected outlay of Rs. 15886 crores for the entire 12th five year plan period. The TUFS scheme has been extremely successful in mobilizing significant investments into the textiles industry. As I had said, Rs. 2.07 lac crores of investments could be catalyzed under TUFS. Government has approved an allocation of Rs. 7432 crores including Rs. 1972 crores for TUFS for 2011-12. I do hope that the textiles industry’s investment needs will be adequately addressed with this allocation.

Sir, to talk policies in specific; what is your opinion on beneficiary aspects of National Manufacturing Policy for the textile sector?

The proposals in the Policy are generally sector neutral, location neutral and technology neutral except incentivization of green technology. While the NIMZs are an important instrumentality, the proposals contained in the Policy apply throughout the country wherever industry is able to organize itself into clusters and adopt a model of self-regulation as enunciated. Textiles industry has a lot to gain if it decides to benefits from the concessions and flexibilities given in the policy. A defining feature of the Policy has been the endeavor to improve the business regulatory environment by providing single window clearances. In order to protect the interests of labor in the eventuality of a closure of a unit, a suitable mechanism has been devised using innovative job loss policy/sinking fund to insure workers against such loss. Moreover, the third party inspections to supplement the inspections by government agencies for compliance monitoring for both labor and environment are included. Green manufacturing has received a special attention and a Technology Acquisition Fund will be established to acquire global technologies and build a patent pool for appropriate sectors including manufacturing of equipments, which seeks to reduce energy consumption.

Attuning on the same note, I am glad to share that we at Fibre2fashion, taking initiative for giving back to society through a campaign meant to spread awareness about <i>Sustainable and Environment Friendly Manufacturing</i> practices in one of the most pollutant sectors- dyes & chemicals, are coming up with special feature on Sustainability. Millions of our global visitors who have welcomed the concept, would love to know your take on "Sustainability and doing business the responsible way."

Sustainable business practices are not only a collective responsibility of the entire generation but a business imperative also. As discussed previously, in National Manufacturing Policy we have incentivized green technologies. Green manufacturing has received a special attention and a Technology Acquisition Fund will be established to acquire global technologies and build a patent pool for appropriate sectors including manufacturing of equipments, which seeks to reduce energy consumption. India has made rapid strides in the renewable energy sector and we are the fifth largest wind energy producers in the world. Our ambitious National Solar Mission has set a target of 20 GW solar power generation capacities in this decade. We will also be adding 25 GW of nuclear energy capacity over the next decade, which will see investment of over US$ 80 billion. Similarly, India has a total hydropower potential of 150 GW with huge untapped potential especially in the small and micro Hydel sector.

Sir, as the industry is all set on her growth path, concluding our talk here, any message you may like to give to investor community-

India continues to be one of the favored destinations for FDI, having been reported as the third most attractive investment location for 2011-13 by UNCTAD World Investment Report (WIR) 2011. There have been many rationalizations and steps to streamline investment climate and Consolidated FDI circulars document these steps. We will continue to make the FDI policy more investor friendly.

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Click here to view Face2Face with Former Union Textile Minister (2010), Govt of India Click here to view Face2Face with Former Union Textile Minister (2007), Govt of India

Published on: 07/11/2011

DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.