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Reforms in Textile industry regulations needed

Jan '07
Abolishing cess only on ready-made garments by Government will not amount to much as ending irrational and complex old laws, guidelines and institutions to manage the $46 billion textile and clothing industry is the need of the hour.

The Textile Committee, established in 1963 to verify and certify export-worthiness of textiles and garments has stopped doing this 15 years ago and instead offers consultancy, runs cloth testing laboratories, does market research and so on.

Cess was initially charged at a rate of 0.025 percent on value of all yarns, fabrics, made-ups, home furnishings, garments and textile machinery manufactured in the country and was later raised to 0.05percent.

The cess that contributed Rs 53 crore during 2005-06 to the consolidated fund of India will contribute Rs 60 crore this year.

The Textile Commissioner's office earlier used to authorise norms for export of farm produce after assessing demand and supply situation under Cotton Control Order (CCO). But cotton production this season is estimated to reach 270 lakh bales of 170 kg each against 177 lakh bales three years ago, moreover export of raw cotton has been freed, nullifying the need to enforce CCO.

Presently Textile Commissioner's office has restricted its activities to export promotion and industry facilitation to perform the function of enforcing stamping regulations of fibre content and composition which could very well be looked after by Bureau of Indian Standards and Customs authorities (for imported products).

Separate councils for cotton (Texprocil), synthetics (SRTEPC), woollen (IWEPC), silk (ISEPC), powerlooms (PDEXCIL), handlooms (HEPC) and garments (AEPC) exists.

Many of these councils used to administer quotas. But quota regime for exports of textile and clothing to the US, the EU and Canada has been abolished hence under the changed scenario these councils may be combined into one due to their reduced roles.

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