The textile sector of India, the second largest employment provider in the country, after agriculture, is still fighting with the economic downturn, though the overall economy is indicating signs of early recovery, informed an ASSOCHAM report.
This sector employs about 91 million people and as per the report by the Associated Chambers of Commerce and Industry (ASSOCHAM), the textile industry is still witnessing plunge in exports and massive layoffs.
In the last few months, about one million employees had been laid-off from the industry due to fall in orders from the recession-hit markets like Europe and the US, said ASSOCHAM President, Mr. Sajjan Jindal.
Textile industry's share in country's total export earning is 13 percent and in the gross domestic product (GDP) it is 4 percent. These exports decreased by 1.71 percent to US $21.75 billion in 2008-09, compared to $22.13 billion in the previous fiscal year.
Handicrafts were one of the maximum hit segments that fell down to $1.79 billion in 2008-09 from $3.48 million in 2007-08, down 48.35 percent. During last fiscal, the textile industry attracted an investment of Rs. 49,613 crore ($10.4 billion), about half than that of Rs. 90,369 crore in 2006-07.
There should be an increase in the funds under the Technology Up-gradation Funds Scheme (TUFS) from Rs. 3,140 crore to Rs. 4,500 crore for the textile industries, said the report.
These funds can be used to clear subsidy payments backlog and to improve technology up-gradation of units, added Assocham.
The industry report revealed that the sector is still facing power shortages and high power cost. For the new investments made in the textile industry, the government should provide electricity at lower costs, stated Assocham.
Fibre2fashion News Desk - India
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