The Hindu Business Line : Textile sector attracted Rs 65,481 cr investment during 1999-2006: Study

Coimbatore May 1 The domestic textile sector has attracted an investment of Rs 65,481 crore between 1999, when the technology upgradation fund scheme (TUFS) for the sector was introduced, and March-ended 2006. But nearly 42 per cent or Rs 27,599 crore of the investment has fallen outside the TUFS.

This means that the textile units had chosen to invest this much amount by not taking recourse to the TUFS route.

The amount invested using the TUFS mode during this period actually works out to only Rs 37,882 crore, according to the latest textile industry data compiled by the Ministry of Textile under its `Official Indian Textile Statistics 2005-06. (The investment has been worked out on the basis of domestic availability of textile machinery).

Another interesting piece of statistics provided in the textile data compilation is that the foreign direct investment (FDI) attracted by the domestic textile sector continued to remain quite low. As a percentage to total FDI (for all industries) in India that remained at Rs 1,05,009 crore during 1991-2002 period, the FDI in textiles at Rs 1,077 crore then worked out hardly 1.03 per cent. After four years, the FDI in textiles as on end-March 2006 stood at Rs 1,774 crore in the total FDI of Rs 1,61,411 crore or 1.10 per cent of the gross FDI of all industries.

In terms of institutional credit to textiles vis-à-vis all industry, there has been a steady slide in the sanctioned financial assistance (by all India financial institutions) to textiles as a percentage to all industry between 1999-00 and 2003-04 from 5.79 per cent (at Rs 5,232 crore against all industry's Rs 90,429 crore) to 1.42 per cent (at Rs 689 crore against Rs 48,652 crore).

The data on profitability ratio of the textile sector vis-à-vis all industry has shown a steady slide from 8.1 per cent (14.2 per cent for all industry) to 3.5 per cent (9.8 per cent) between 1995-06 and 2001-02 but thereafter it kept going up to 8.1 per cent (10.4 per cent) in 2002-03, 7.4 per cent (11.4 per cent) and 7.6 per cent (13.2 per cent) during 2003-04 and 2004-05, respectively.

Textile units (601) accounted for a sixth of the number of all industries (2,999) in having outstanding bank credit and as against the total outstanding credit of Rs 21,518 crore as on end-March 2003 by all industries, textile accounts' outstanding worked out Rs 4,153 crore.

The number of sick textile mills registered with the Board for Industrial and Financial Reconstruction which were 411 up to 1999 had doubled by 2005 when its number hit the 825 figure. The number of textile mills closed as on end-March 2006 stood at 483 involving 9.6 million spindles, 92,000 rotors, 49,000 looms and 3.3 lakh workers.

The Indian textile statistics 2005-06, the 15th edition in the series brought out by the office of the textile commissioner covers data on cotton, man-made fibre, processing industries, technical textiles, textile machinery, silk, wool and jute sectors, exports/imports with state-wise data on production which would serve as a reference source for textile entrepreneurs, planners and analysts of the industry.

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