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G. Gurumurthy

COIMBATORE, Dec. 12

THE Ministry of Textiles has sounded `go-slow' in taking any penal action against the textile units defaulting in fulfilling their shortfall of the hank yarn-packing obligation (HYPO) for the April-June/July-Sept 2002 quarters.

The Ministry has advised its field officials attached to the office of the Textile Commissioner enforcing the HYPO asking them not to initiate any prosecution beyond `serving' show-cause notices against the units that could not fulfil the prescribed limits of HYPO either through transfer of excess hank yarn packing from other mills or by their own production.

The Ministry has advised the enforcement officials not to go for any penal action straightway at the expiry of the deadline already given; instead they could persuade the mills to comply with the packing obligation.

The go-slow advice issued to the field officials in the form of internal communication has been made in the wake of representations from textile mills having a backlog of HYPO for the two immediate past quarters. The mills had explained in their representation the difficulties in bridging the shortfall and sought further time extension.

The Ministry's move should bring relief to scores of textile spinning units in the region which have huge backlog of HYPO left unfulfilled for want of adequate quantities of excess hank yarn for transfer. Normally, the enforcement officials close on the heels of the show-cause notices are expected to follow them up with prosecution of the defaulting units under the Essential Commodities Act provisions.

The sources in the regional office of the Textile Commissioner here too confirmed about the Ministry's latest advice. Based on this, the officials enforcing the HYPO on spinners have now allowed more time for the mills to fulfil the shortfall in hank yarn packing reported by them during the two immediate past quarters, namely the April-June and July-Sept.2002 quarters.

The Ministry had earlier set the December 2 as the deadline for the textile mills coming under the HYPO to fulfil their shortfall in hank yarn packing for the two outstanding quarters. Now, following the Ministry's directive, the regional office of the TC here has extended the time limit for fulfilling the shortfall and also filing of the returns till December 27, it is learnt.

The Ministry's suggestion to go slow on the HYPO implementation is also expected to bring down the heat on the prevailing premium being quoted for transfer of the excess hank yarn from the spinners having surplus hank yarn production to the units facing shortfall of hank yarn packing.

Obviously, the Ministry's direction is also in a way intended to bring down the premium rate demanded for book transfer of hank yarn by surplus producers.

Already, the hank yarn market sources say the premium rates on hank yarn transfers have started coming down in the past few days following the serious bid made by the textile industry in the region to get deferment of the time for fulfilling the shortfall in HYPO for the past two quarters.

In fact the Ministry, acting on the spinners' earlier request, allowed the mills which had backlog in HYPO for the April-June 2002 quarter to fulfil the outstanding obligation along with the HYPO for the July-September 2002 quarter.

With the Government deciding to go slow in the matter, the spinners having surplus hank yarn packing are to necessarily dispose of whatever excess hank yarn they have with them and close the account within the current October-December quarter; they can't carry forward the excess beyond December.

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