MARCHING AHEAD TO NEWER HEIGHTS
K. Rajendran Nair *
The Indian textile
industry is large and diverse, unique for its coverage of the
entire gamut of activities ranging from production of raw material
to providing the consumers high value added products, such as
fabrics and garments. It plays a significant role in the country’s
economy for its contribution to the Gross Domestic Product (GDP),
employment generation and earning of foreign exchange. The textiles
sector contributes four per cent of GDP and 25 per cent of the
total export earnings. As per estimates, 93 million people are
earning their livelihood from this sector.
The multi-fibre
base of our textiles comprises natural fibres such as cotton,
jute, flex, silk, wool and coir, and synthetic and man-made fibres
from polyester, viscose, acrylic, polypropylene and nylon. The
wide spectrum of Indian textiles includes hand-spun, hand-woven
khadi, hand-woven (handloom) textiles, handcrafted textiles and
textiles woven on powerlooms in the decentralised sector and also
in the technologically advanced, sophisticated, state-of-the art,
capital intensive mills in the organised sector and fabrics made
in the knitting sector. Apart from cotton and jute agriculture,
sericulture, sheep-rearing, production of coir, and manufacture
of chemicals and intermediates required for the manufacture of
synthetic and man-made fibres, the entire gamut of activities,
such as ginning and pressing, spinning, weaving, processing and
garment-making is carried out within the country. The Indian textile
industry is as composite as the country itself; it combines with
equal felicity this immense diversity into a cohesive whole. Perhaps
it is the only sector which is fully composite, complete and self-reliant,
from raw material to ready wears, and from fibre to fashion.
Our textile industry
contributes significantly to the world textile production capacity
and supply of fibres. It contributes to the extent of 21 per cent
to the spindleage and six per cent to the world rotorage. With
57 per cent of the total loomage including handlooms, it has the
highest loomage in the world. Excluding handlooms, India’s contribution
to the world loomage is 33 per cent.
India is the largest
producer of jute in the world. It is also the second largest producer
of silk, the third largest producer of cotton and cellulosic fibres
/ yarns, and the fifth largest producer of synthetic fibre/yarn.
The problems faced
by the Indian textile industry in the past included low productivity
of cotton, lack of attention to quality at the stage of ginning
of cotton, obsolescent machinery, low labour productivity, lack
of incentives for technology upgradation, sickness in the industry,
difficulties in attracting investments and irrational fiscal duty
structures not conducive to enhancing the comparative and competitive
advantage of the Indian textile industry in the world scenario.
The Textile Policy
of 1985 and the Economic Policy of 1991 have enabled the textile
sector to be optimistic about its future growth and development.
Thanks to the entrepreneurs and the resilience of this sector,
a substantial progress could be achieved during the last decade.
Still a lot more requires to be done to equip the industry to
face the challenges in the W.T.O. regime beginning January 2005.
In the recent
years, the Government took several measures and implemented forward-looking
and growth and investment-oriented schemes and programmes to make
the textile industry competitive in a global scenario.
National Textile
Policy, 2000
The Government
formulated and announced a new Textile Policy on November 2, 2000,
redefining the goal and objectives, and focusing on strategic
thrust areas so as to strengthen the textile industry and make
it globally competitive by facilitating and enabling technological
upgradation of all manufacturing segments of the industry; increasing
the raw material base by emphasis on productivity and quality;
integrating human resource development with special attention
to those working in the decentralised and the traditional sectors;
giving attention to product diversification with a strong impetus
to blends and innovative marketing strategies; and giving paramount
thrust to exports. The vision statement of the policy is to build
a strong and vibrant industry that will produce cloth of good
quality at acceptable prices to meet the growing needs of the
people, increasingly contribute to the provision of sustainable
employment and the economic growth of the nation and compete with
confidence for an increasing share of the global market.
Textile Package
A textile package
was announced in the Finance Minister’s Budget Speech of 2001,
containing, inter alia, the launch of a scheme for setting up
Integrated Apparel Parks; modernisation of 2.5 lakh plain looms
to automatic looms and acquisition of at least 50,000 new suttleless
looms by the industry by the year 2004 through funding from the
Technology Upgradation Fund Scheme (TUFS); enhancement of the
budgetary provisions for textile sector activities and programmes;
incentive for modernisation by enhancing depreciation rate of
machinery installed under TUFS to 50 per cent per annum; and restructuring
of duty on textile and textile machinery items by removing 10
per cent surcharge and reducing customs duties on raw material.
The Textile Package
announced in the Finance Minister’s Budget Speech, 2002 provided
facility to weavers of grey fabrics also to pay excise duty and
to avail themselves of the benefits under the CENVAT Scheme; rationalised
and fixed excise duty on fabrics; allowed continuance of excise
duty on handloom fabrics; and introduced exemption from excise
duty to garments made from handloom fabrics. To encourage the
industry to modernise itself and acquire new technology, excise
duty on automatic shuttleless looms was exempted. Customs duty
on specified processing machinery and specified silk reeling and
weaving and twisting machinery was reduced from 25 per cent to
10 per cent. Specified jute machinery was also exempted from excise
duty.
The Apparel Parks
for Exports Scheme was launched in March 2002 with a view to giving
a focused thrust for setting up apparel manufacturing units of
international standard at potential growth centres. The Government
has already sanctioned nine park projects under the scheme in
different States so far.
The Textile Centres
Infrastructure Development Scheme was launched in March 2002 for
providing infrastructure facilities at major textile centres in
the country. Two projects have already been sanctioned under this
scheme.
The Technology Upgradation
Fund Scheme (TUFS) was launched on April 1, 1999 with the objective
of providing an impetus to the modernisation and technology upgradation
of textile and jute industry. To enable SSI units to avail themselves
of the benefits under TUFS, the option to take an upfront 12 per
cent credit-linked capital subsidy has also been provided. Under
this scheme, loans amounting to Rs. 4202.60 crore were disbursed
to 1430 applicants till the end of December 2002.
Technology
Mission On Cotton
In order to improve
the production, productivity and quality of cotton in the country
by bringing the entire gamut of research and development and marketing
and processing of cotton, the Government launched a Technology
Mission on Cotton (TMC) in February, 2000. TMC’s target is to
develop about 250 market yards in different cotton growing States
in the country. The Mission has already taken up 94 projects and
out of them, 51 have been completed. This will enable 30 per cent
of raw cotton arrivals to be marketed in contamination – free
form. When all the 250 market yards are developed with modern
facilities by the year 2006-07, it is expected that more than
80 per cent of the Indian cotton would get transacted free of
contamination in the country. As regards modernisation of ginning
and Ppressing (G&P) factories, TMC has targeted 600 composite
G&P units. So far, modernisation programme has been sanctioned
in respect of 142 units. By the year 2006-07, there would be at
least 600 TMC – modernised units capable of processing 50 per
cent of the cotton produced in the country.
The Governmental
initiatives have had a positive impact on the various sectors
of the textile industry. Cotton and man-made fibre textile mill
industry is the single largest organised industry in the country
employing nearly 10 lakh workers. Ancillary industries are also
dependent on this sector. It provides livelihood to at least 50
lakh people.
There has been
a phenomenal growth in spindleage during the recent years. It
increased from 33.15 million in 1997 to 35.84 million by August
2002. The number of rotors increased from 2.76 lakh to 3.75 lakh
during the same period. In cotton yarn, the Indian spinning industry
is a world leader contributing over 25 per cent of the world trade.
In polyester and viscose yarn also there is a large and fast growing
production base.
The production
of spun yarn increased from 2794 million kg during 1996-97 to
3101 million kg during 2001-02. The contribution of the SSI sector
in spun yarn production is about seven per cent.
In the organised
sector, however, the loomage has decreased over the years. Consequently,
the production of cloth in the organised sector declined from
1957 million square metres in 1996-97 to 1546 million square metres
in 2001-02. The contribution of the organised sector in the total
fabric production by all sectors put together declined from 5.6
per cent in 1996-97 to 3.68 per cent in 2001-02.
Powerlooms
The decentralised
powerloom sector has been playing a significant role in meeting
the clothing needs of the country. The generation of employment
and production of cloth in this sector have steadily been increasing.
During 1996-97, this sector had produced 19,352 million square
metres of cloth. Its contribution to the total cloth production
was 55.55 per cent. During 2001-02, powerloom cloth production
has been of 25,192 million square metres. That constituted 59.9
per cent of the total cloth production by all sectors put together.
During 1996-97,
the number of powerlooms was 14.16 lakh. This number rose to 16.76
lakh by the end of September 2002.
For providing
support to the powerloom sector, 44 powerloom service centres
(PSCs) have been established at various places in the country.
The PSCs have been imparting training on powerlooms, developing
designs and testing samples. They also organise exhibitions, seminars
and workshops. Between April 2001 and September 2002, the PSCs
trained 1705 persons, developed 3608 new designs, tested 58,459
samples and organised 183 exhibitions, seminars and workshops.
The new initiatives of the Government for developing the powerloom
sector include a programme for modernisation by 2004. The main
instrument for achieving this is the TUFS, which has since been
modified to allow the beneficiaries the option of taking a five
per cent reimbursement of interest or a 12 per cent subsidy upfront
linked to credit.
A programme for modernisation
and strengthening the PSCs was also taken up. During the 9th Plan
period, the Government approved modernisation and strengthening
of 21 PSCs at a cost of Rs. 16.09 crore. The remaining PSCs are
to be modernised during the 10th Plan. In the year 2002-03, the
target has been to modernise eight additional PSCs at a cost of
Rs. four crore. To enable the PSCs to provide modern testing facilities
to entrepreneurs in the powerloom sector, the Central Government
has decided to upgrade the existing laboratories in the PSCs.
Under this programme, the laboratories of 14 PSCs have been upgraded
at an expenditure of Rs. 10.70 crore.
A modified Group
Insurance Scheme for Powerloom workers has been formulated as
one of the measures for their welfare. The Workshed-cum-Housing
Scheme has also been revised so as to enable powerloom workers
to set up their looms in group worksheds, or worksheds in industrial
or apparel parks.
* Former Secretary, Ministry of Textiles
