The Hindu Business Line : ‘Don’t force textile sector to bear power subsidy burden’

Chennai, June 29 Textile industrialist Mr Manikam Ramaswami has called for setting up of an ‘economic research organisation’ jointly by the Confederation of Indian Textile Industry (CITI), the Apparel Export Promotion Council (AEPC) and The Cotton Textiles Export Promotion Council, with consultants from premier national and international academic institutions.

Speaking at a conference on ‘Managing Changes in the Indian Textile and Clothing Sector,’ he said that speed is of the essence in international trade and policy decisions should not be delayed because of inter-Ministerial consultations.

Mr Ramaswami, Chairman and Managing Director of Loyal Textiles Ltd, also underlined the need to corporatise and privatise the transmission and distribution (T&D) of power, with multiple vendors.

The cost of power to users could be brought down to around Rs 2.75 a unit if only these losses and cross-subsidisation are reduced.

While lauding the State Governments’ efforts to give subsidised or free power to agriculture, he said they should not force the industry to bear the subsidy costs.

“It should come out of the respective State’s Budget as export-dependent industry cannot afford cross-subsidy.”

On the impact of the rupee appreciation, Mr Ramaswami said: “Our cries for help consequent to the 12 per cent drop in dollar value has only reached the Commerce Ministry level; it is yet to get past the Finance Ministry.”

Earlier, Mr Shekhar Agarwal, Chairman of the CITI, said that the demand from Western countries for Indian textile products has been declining in recent months “as part of the fashion cycle.”

One of the main reasons for this deceleration is the hardening of rupee against the dollar.

The unprecedented appreciation of the rupee during the last few months has taken away the attraction of quota-free export market.

Cotton prices too continue to rule high, despite record levels of production in recent years.

Increasing interest rates have made investments more difficult and the delays in disbursement of TUFS assistance for the last fiscal as well as delay in announcing the scheme for the current year have aggravated this problem.

In response to issues related to TUFS assistance, Mr J.N. Singh, Textile Commissioner, said that disbursement of arrears amounting to Rs 400 crore may take place in a couple of weeks.

He added that the modified TUFS was likely to be announced very soon and the SITP (Scheme for Integrated Textile Parks) is also expected to continue in the 11th Plan period with slight modifications.

The SITP has been a “huge success,” he said, adding that 26 parks have been approved so far and the Government’s contribution for the project is about Rs 866 crore.

The private sector has brought in Rs 1,250 crore.

On the need for FDI, he said that weaving and processing, home textiles, logistics and supply chain and machinery manufacturing are the key sectors that require FDI.

“Against $5.8 billion in China, investment in India is only $50 million in this sector.”

Mr Singh also called upon yarn producers to forward-integrate into garments production to become competitive.