G. Gurumurthy

Coimbatore, July 31

THE apex textile body, the Southern India Mills Association (SIMA), has welcomed the Centre's move to abolish the Textiles Committee cess.

The association in a statement described the recent announcement by the Union Textile Minister, Mr Shankarsinh Vaghela that his government had decided to do away with the Textiles Committee Cess as a `step in right direction.'

The Centre had originally introduced the Textiles Committee Cess on textile goods in 1963 essentially to fund the latter's activities such as mandatory pre-shipment quality inspection. Although the committee's inspection role was withdrawn subsequently by the Government as part of liberalisation of the industry, the collection of cess was allowed to continue. At the time of introduction, the rate of cess raised by the committee was .25 per cent of the value of the product, which was later brought down to .05% . The collection of cess from the industry during 2003-04 was about Rs 42 crore.

Appreciating the Government's move, the SIMA chief, Mr Vijay Venkataswamy, felt that the Centre had chosen to remove the cess considering the fact that the Textiles Committee itself had enlarged the scope of its operations by becoming self-supporting and honing up its skills to cater to the textile industry's needs. He also expressed his desire that the Government adopted similar bold initiative to remove the applicability of the Essential Commodities Act (ECA) on the textile industry.

While cotton textiles no more encounter the short supply scenario, the sector is still kept under the regulation of ECA by compelling the spinning industry to produce 40 per cent of its yarn production for civil consumption in hank farm. With the production under the handloom sector coming down drastically, there is a strong case for the removal of the cotton textiles from the purview of the ECA, he felt.

(This article was published in the Business Line print edition dated August 1, 2005)
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