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Karnataka to shut down silk marketing board
22 Apr '10
2 min read
The Department of Sericulture has decided to shut down their non-viable unit, Karnataka Silk Marketing Board (KSMB). The board was incurring losses since its institution in 1979, excepting for once in 2003-04, when it recorded a net profit of Rs 1.165 million.
Venkataramanappa, State Minister for Small Scale Industries and Silk, while addressing the press said that, it decided upon the closure of the board following the recommendations of A F Ferguson and Company, a consultancy firm.
Government had assigned the consultancy firm to review the board's functions and suggest modes and means to revitalize it. But instead, the consultancy firm suggested shutting down the board.
The Minister said that, imports, unrestricted trade in silk and competition from the private sectors turned KSMB into a loss making unit. He also said that, though during the last fiscal year, KSMB traded in 163 tonnes of silk yarn, way higher than the figures recorded in the previous years; it still failed to book profits. Even after reducing the operational cost and exercising a cut on the amenities provided to its employees, the board's turnover was not sufficient enough to keep it functional.
During 2009-10 KSMB incurred losses of Rs 30 million and a year before it made a loss of Rs 36 million.
Venkataramanappa clarified that, as the board's operational cost is higher than its earnings it was impossible to revive itself even if it manages to trade 500 tonnes of silk yarn. Therefore the decision was taken to shut down the board.
A report is due for submission before the State Cabinet for their approval and closure of the board will come into effect once the state cabinet sanctions the report.
Venkataramanappa, State Minister for Small Scale Industries and Silk, while addressing the press said that, it decided upon the closure of the board following the recommendations of A F Ferguson and Company, a consultancy firm.
Government had assigned the consultancy firm to review the board's functions and suggest modes and means to revitalize it. But instead, the consultancy firm suggested shutting down the board.
The Minister said that, imports, unrestricted trade in silk and competition from the private sectors turned KSMB into a loss making unit. He also said that, though during the last fiscal year, KSMB traded in 163 tonnes of silk yarn, way higher than the figures recorded in the previous years; it still failed to book profits. Even after reducing the operational cost and exercising a cut on the amenities provided to its employees, the board's turnover was not sufficient enough to keep it functional.
During 2009-10 KSMB incurred losses of Rs 30 million and a year before it made a loss of Rs 36 million.
Venkataramanappa clarified that, as the board's operational cost is higher than its earnings it was impossible to revive itself even if it manages to trade 500 tonnes of silk yarn. Therefore the decision was taken to shut down the board.
A report is due for submission before the State Cabinet for their approval and closure of the board will come into effect once the state cabinet sanctions the report.
Fibre2fashion News Desk - India
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