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The textile industry is the largest employer of unskilled labour in Tamil Nadu after agriculture, which is rapidly getting mechanised, thanks to the steep increase in farm wages consequent to NREGA. The industry is also the largest consumer of power in the State. But it does not contribute to the State's exchequer, except by way of sales tax on non-hank, non-hosiery yarn and on a small per cent of cotton (only 50-60 per cent of the cotton grown in the State is officially bought by mills).
Ground reality
Before going to what the State can do to improve the situation, one needs to take a closer look at the ground realities.
In Tamil Nadu, there is hardly any unemployment in the low-wage category. Textile operations cannot support high wages, a fact that has made many textile associations resist paying minimum wages.
Industries face20 per cent power shortage, even as the State readies itself to attract several high-tech auto, IT and aerospace industries.
Needs to also protect the existing units from turning sick.
In spite ofa SIMA textile park at Cuddalore, a large part of the pollution problem will continue. The fixed cost of zero discharge is only a small part of the problem, the bigger one is the operating cost which will cripple the dye houses unless the State agrees to subsidise the recurring costs too.
Given this state of affairs, there is a need to come out with an appropriate policy for textiles which will benefit the State and its people and not burden it.
Policy prescription
No concessions of any kind should be given for expansion or creation of new textile capacity in the State.
Given the inability of the Pollution Control Board to ensure pollution-free processing in the belts where dyeing factories are located, creation of new capacities should be allowed only where marine disposal is possible or in units which have proven zero-discharge facilities and are willing to operate their ETP units without any State subsidy.
Work closely with the Central Government to allow international vessels to carry textile raw-materials and finished products between Indian ports to reduce logistics cost.
Refund VAT inputs incurred on textile exports (evidence based), and on all liquid fuels used in power generation until power cuts are removed.
Exempt textiles and garments from the ESI Act and cover the workers under a more user-friendly, affordable insurance scheme. ESI is not used by 60 per cent of those insured according to a survey by CII Tamil Nadu. Meeting healthcare costs tops the list of reasons why textile workers take loans.
Work with the Central Government to ban waste cotton/comber noils export to make the reprocessing industry producing bed-sheets and lower count yarn products competitive (most units consuming waste are located in Tamil Nadu). Also, the Centre may be requested to remove import duties on these raw materials to bring down the cost of waste.
Tamil Nadu has a rich heritage of handlooms and home textiles, these need to be supported by establishing a ‘gurukulam' model handloom village (this can also double as a tourist attraction if designed aesthetically and can be done in co-operation with the tourism board) in centres such as Kanchipuram, Arani and Chinalapet.
The new policy must aim at making existing units more competitive and, more importantly, compliant than encourage an industry which is rapidly losing its relevance in the State in its present form.
03 March, 2010 by admin