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SIMA chief lashes out at arbitrary textile policies
08 Apr '09
2 min read
The yarn spinning sector and the cotton industry in particular was riding on a rising wave of growth since the last few years. Unbridled expansion was the name of the game in the last few years.
But the global economic crisis which unfolded last year has brought the spinners back down to earth helped in less measure by the policies and problems they faced during 2008, other than tackling the monster of recession.
Tamil Nadu which has the highest concentration of cotton spinning mills in the country and contributes nearly 50 percent to the total cotton yarn output of the country has to face several tribulations in the last few years.
According to data available with the Southern India Mills Association (SIMA), total yarn output in the country touched 4 million tons in the fiscal year 2007-08 which fell to 3.2 million tons in the just completed fiscal ending March 31, 2009.
The previous fiscal was also a witness to the closing down of 392 textile mills in the country which led to 254,000 workers being thrown out of their jobs across the textile sector in the country.
Fibre2fashion spoke to Secretary General of SIMA, K Selvaraju who categorically said, “Tamil Nadu is facing problem of power shortage of up to 55 percent, which might improve by May and is expected to stabilize by September this year”.
He added, “The Central Government has taken some negative steps which has affected the industry badly like reducing duty draw back duties drastically in December and withdrew 4 percent interest on subvention of export credit”.
He continued, “The Government arbitrarily increased MSP of cotton by 25-40 percent and to add salt to our wounds has now announced 5 percent interest on cotton exports, which will subsidize the cotton industry of our competitor countries”.
“And now since cotton stocks have piled up across the warehouses of CCI and Nafed, these two cotton procurement government agencies are now offering discounts on bulk purchases of cotton in a bid to clear their huge stocks”, he said.
He ended by saying that, “These policies have worked against the interests of the textile mills in the country and has only benefitted the traders involved with the sector rather than the textile mills or the farmers”.
But the global economic crisis which unfolded last year has brought the spinners back down to earth helped in less measure by the policies and problems they faced during 2008, other than tackling the monster of recession.
Tamil Nadu which has the highest concentration of cotton spinning mills in the country and contributes nearly 50 percent to the total cotton yarn output of the country has to face several tribulations in the last few years.
According to data available with the Southern India Mills Association (SIMA), total yarn output in the country touched 4 million tons in the fiscal year 2007-08 which fell to 3.2 million tons in the just completed fiscal ending March 31, 2009.
The previous fiscal was also a witness to the closing down of 392 textile mills in the country which led to 254,000 workers being thrown out of their jobs across the textile sector in the country.
Fibre2fashion spoke to Secretary General of SIMA, K Selvaraju who categorically said, “Tamil Nadu is facing problem of power shortage of up to 55 percent, which might improve by May and is expected to stabilize by September this year”.
He added, “The Central Government has taken some negative steps which has affected the industry badly like reducing duty draw back duties drastically in December and withdrew 4 percent interest on subvention of export credit”.
He continued, “The Government arbitrarily increased MSP of cotton by 25-40 percent and to add salt to our wounds has now announced 5 percent interest on cotton exports, which will subsidize the cotton industry of our competitor countries”.
“And now since cotton stocks have piled up across the warehouses of CCI and Nafed, these two cotton procurement government agencies are now offering discounts on bulk purchases of cotton in a bid to clear their huge stocks”, he said.
He ended by saying that, “These policies have worked against the interests of the textile mills in the country and has only benefitted the traders involved with the sector rather than the textile mills or the farmers”.
Fibre2fashion News Desk - India
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