Economy

Spinning sector seeks review of HYO scheme

L N Revathy Coimbatore | Updated on March 10, 2015 Published on March 10, 2015

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To mandate the textile spinning sector to produce 40 per cent of their total output as Hank Yarn is absurd and not in sync with the present. There is a need to either scrap this Hank Yarn Obligation or reduce it to 10 per cent, say spinning industry sources.

Suggesting the removal of the Hank Yarn Obligation (HYO) Scheme to Secretary – Textiles Sanjay Kumar Panda, Texpreneurs' Forum, a knowledge forum formed by like-minded textile entrepreneurs in this region, said “it (HYO) has outlived its utility and creating harassment and hardship to the textile industry in the country.”

“Though imposed with a good intention of providing handloom weavers with the necessary raw material in the early days, it has over the years, with introduction of the Technology Upgradation Fund Scheme and other initiatives of the textile ministry become redundant as handloom weavers have either moved to power looms or auto looms. There is hardly any demand for hank yarns,” said D Prabhu, Secretary, Texpreneurs' Forum.

“However, if there is ample demand for HY, the spinning industry would be only too willing to produce and sell such goods. But there is 1880 per cent excess production of HY in the State. Imposing artificial restriction on production in such a situation is causing huge hardship and the procedure for ensuring compliance is complex and cumbersome,” he added, sharing spindleage capacity and production figures as detailed below:

Industry sources said that this impossible situation pushed the sector to cook up production records, creating a window for the enforcing officials to indulge in corruption.

“Some estimates say that around Rs 50 cr to Rs 60 cr of black money is being generated in the process,” an industry source said, preferring anonymity.

The Forum has meanwhile appealed for removal of such restrictive policies.

Hailing the Textile Ministry's initiative of appointing an external agency to review the HY policy review, Prabhu said “we await the findings of this agency; we are confident that it will reflect our suggestion on HYO.”

Published on March 10, 2015
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