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Monday, Feb 18, 2002

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'Deregulate cotton from ECA purview'

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THE Chamber of Textile Trade and Industry (COTTI) has questioned the Centre's wisdom of still keeping cotton and related textile products under the purview of the Essential Commodities Act, 1955, particularly when domestic textile industry and trade are operating in the buyers' market, notwithstanding the move towards liberalisation and globalisation under the WTO regime.

In a representation to Mr Shanta Kumar, Union Minister for Consumer Affairs and Public Distribution, the chamber President, Mr Murari Lal Khaitan, said that the country's cotton textile scenario had undergone radical changes between 1955 and 2002.

If acute shortage and scarcity of textile products prevailed during 1955 for which control of production, sale, pricing and distribution was necessary in the national interest, the situation had altogether changed with the industry strengthening its position to such an extent that there was excess production.

Mr Khaitan felt that cotton and related textile products should be deregulated from the list of ECA, thereby paving the way for speedy development and modernisation of the domestic textile sector and also making it capable of facing the emerging global competition.

He said the industry, even after meeting the entire demand of the domestic market, exported textile products worth Rs 55,000 crore during 1999-2000. Moreover, owing to current production being far in excess of demand, a number of textile mills were either working under capacity or were lying closed. This apart, consumer preference had drastically changed from cotton to man-made fibre and made-ups because of cheaper cost and durability.

He also pointed out that cotton and related textile items provide livelihood to millions of workers engaged in manufacturing and distribution, throughout the country. Present production being far in excess of demand, Mr Khaitan reiterated that governmental interference was now not required to control production and distribution of textiles through enforcement of law. Stringent provisions of the Act would serve no purpose other than promoting "Inspector-Raj'' and the resultant "breeding ground for corruption'', thereby retarding the natural growth of this sector, he said.

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