The Hindu Business Line : Plea to check rise in hank yarn prices

THE handloom cloth manufacturers in the State have urged the Centre and the State Government to take urgent measures to arrest the rise in the cost of hank yarn in order to protect the handloom and powerloom industries.

According to Mr M. Balasubramaninan, Secretary, Sellur Cloth Manufacturers Association here, the Centre has planned to raise foreign exchange to the tune of $50 billion through the textile sector. If the Government extended a helping hand to the handloom and powerloom sectors, this target could be easily achieved. For this, the present problems of the sectors needed immediate attention.

He said the introduction of excise duty on yarn and textile products has caused a cascading effect on the industry during the last two years. Though a 9.2 per cent excise duty was announced on hank yarn in the 2001-02 budget, it was assured in Parliament that the yarn would be supplied to the handloom weavers without the levy.

The association has also urged the Centre to withdraw the 9.2 per cent excise duty in toto and if it was not possible, they should at least do so in the case of the yarn below the 40s counts. Till then, the Central Government should directly distribute yarn to handloom weavers.

During the current year, the Government has announced a 10 per cent excise duty on all textile items. But it will be unjust to withdraw the hitherto extended tax exemption to the units in the small-scale industry with a turnover of Rs 1 crore per unit, he said.

Mr Balasubramanian said apart from the excise duty imposed by the Centre, the hike in the price of yarn by 25 per cent within the last two months too has added to the woes of the weavers. The price rise should be brought down by importing cotton without any tax. The Centre, by invoking the Hank Yarn Obligation Act, should make sure that all the spinning mills manufactured 50 per cent hank yarn, of which 80 per cent should be earmarked for the below 40s counts. The Centre should recommend to the Reserve Bank of India to issue directives to these banks not to levy more than 8 per cent interest on loans disbursed to the textile sector. The Government should also implement the recommendations of the Planning Commission member, Mr K.N. Singh. Adequate care must be taken to ensure that the regulations laid down by the TNPCB did not affect the handloom industry. All these have been presented in a memorandum to the Union Minister of State for Textiles, Mr Gingee Ramachandran, during his recent visit to the city.

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