The Hindu Business Line : 3-pronged strategy for 16% growth in textile industry

Term measures
For the short term, to cover problems related to production, exports
In the medium term, aims to provide world-class infrastructure.
Targets issues of labour flexibility for the long term.

Mr A.K. Singh

G. Srinivasan

New Delhi, Sept. 18 The Ministry of Textiles is adopting a three-pronged strategy encompassing short, medium and long-terms to ensure that the textile industry registers a growth of 16 per cent a year in value terms to reach the level of $115 billion consisting of exports at $55 billion and domestic market sale of $60 billion by 2011-12, the final year of the Eleventh Plan.

Disclosing this to Business Line here in an interview, the Secretary, Textiles, Mr A.K. Singh, said the short-term measures cover the industry’s immediate problems that have a bearing on production and exports. He said that since 2004, in the post-quota regime of free global trade in textiles, the government has been taking steps to address the shortcomings of the industry. He said there could never be complete satisfaction from the stakeholders as the industry is a much diversified one, ranging from wool, silk, carpet, jute, cotton, man-made fibre to value-added technical textile products.

Mr Singh contends that the final product of one sector is the raw material for the other sector and as such, if the cotton is made cheap, farmers will suffer and if the yarn is made cheap when the cotton prices are higher, the farmer would make necessary profits but the spinning units would suffer.

So the authority has to “balance” the interests of the diverse segments of the industry and the government did come out with several initiatives such as interest subvention for pre-shipment and post-shipment credit to exporters, scheme for market development and product diversification, manpower development and increased drawback and DEPB rates to moderate rupee appreciation last year.

Textile parks

In the medium term, Mr Singh said, the aim is to provide a world-class infrastructure through the Scheme for Integrated Textile Parks (SITPs). As many as 30 such parks have been set up in the Tenth Plan (2002-07) and another 10 more was sanctioned in the first year of the Eleventh Plan. Mr Singh said this scheme is purely demand-driven, where a group of entrepreneurs decide among themselves as to what type of facilities they want in their parks. However, “what we insist on now is that they should decide on the nature of job they want to undertake in the parks and keeping in view the nature of the industry to be set up, the infrastructure is to be tailored accordingly.”

Illustrating this point, he said, for processing units in the parks, the industry has to have provision for water storage and plants for treatment of effluents, whereas a garmenting unit does not need these but might be in need of captive power plant. He said “we are monitoring this” so that industry-specific infrastructure is built into the parks for the benefits of units. As the demand for SITPs mount, “we are talking with the Planning Commission and am confident of securing enhanced outlays for it”, Mr Singh added.

TUF scheme

The medium term strategy also covers the Technology Upgradation Fund Scheme (TUFS) launched in 1999 to overcome the obsolete production technology of the industry. Even as the scheme provides for 5 per cent interest subvention, this has been brought down to 4 per cent on the spinning machinery industry as it did quite well. “In the Eleventh Plan we have thrust areas in processing where not much investment has come and in garmenting which gives maximum employment.

Asked about import of second-hand machinery being brought in for modernisation, Mr Singh said that this has been restricted only to automatic (shuttleless) looms “as such looms will not be available to the extent of our requirements” and that is “the reason why we have reduced the weightage from 20 years vintage to 10 years”.

In the long-term, Mr Singh said that “we have to address the issue of labour flexibility, particularly in a seasonal industry like garment where shipment needs to be made within 60-70 days of the contract”. While many State governments have brought the labour and industry together to sort out the issue, the government at the Centre has been engaged with all stakeholders to arrive at a solution, with the negotiations remaining a work in progress, he said.

Another long-term measure is creation of investment regions to reduce transaction cost to industry. While textile parks would take care of infrastructure amenities, investment regions on a wider area would identify shortcomings in the region and sort them out with public-private partnerships. “We seek in-principle approval for this from the Planning Commission”, Mr. Singh noted.

More Stories on : Textiles

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page