Textile sector facing crisis

By S. K. Ramoo

BANGALORE, APRIL 5. It is ironical that although the Indian textile industry is showing signs of coming out of recession, the scenario in Karnataka continues to be grim.

This is reflected mostly in the state of health of the cotton mills. Of 62 mills, 19 have been declared sick. Of the 43 working units, many are struggling to survive. Another disturbing trend is that the acreage under cotton is shrinking and has come down to 3.75 lakh hectares at present. The production of cotton has touched a record low of six lakh bales a year from about ten lakh bales some years ago.

What is alarming is that in the traditionally cotton-growing regions of North Karnataka, farmers are switching over to cultivation of other crops such as maize as they have been found that growing cotton is no longer as remunerative.

According to Mr. P. V. Rattayya, Secretary, Karnataka Textile Mills Association, the productivity of cotton grown in the State is low compared to States such as neighbouring Tamil Nadu. He said that in the irrigated belt, DCH 32, CO2 and other varieties which are being grown have become non-remunerative mainly on account of their low yields. In addition, they are easily susceptible to pests and diseases and this is prompting growers to resort to the use of high-cost pesticides. The result is a steep increase in the cost of cultivation. In the rain-fed regions of the State, ``Jayadar'' is popular, but unfortunately, its yield too has been deteriorating over the years.

The Government, along with the agriculture universities in the State, have failed to introduce improved varieties, which are pest- resistant. They have also been guilty of not introducing high-yielding seeds.

According to Mr. C. Valliappa, Chairman of the Karnataka Textile Mills Association, the textile industry in Karnataka is facing a crisis, mainly because mills are finding it difficult to raise working capital. He pointed out that the high power tariff, coupled with poor quality of power supplied, low productivity and yields and poor quality of cotton grown, have all combined to contribute to the negative trend. In addition, the high rates of Central and State levies, have made the situation worse.

He said that owing to the poor quality of cotton grown in the State, the cotton mills were forced to import the required quality of cotton yarn from neighbouring States. He said that on the job front, the scenario is gloomy as out of 21,500 workers in the textiles sector, as many as 15,500 employees are out of employment. He said that the Textile Upgradation Fund was not availed of by a majority of mills on account of the stringent norms. He said that this fund should be converted into a Textile Workers Rehabilitation Fund to help retrenched workers.

For reasons best known to it, the Vajpayee Government has not implemented the recommendations of the committee headed by the former Textiles Secretary, Mr. Sathyam, constituted mainly to revive and revamp the textile industry.

Mr. Valliappa has prescribed the following measures required to revive the industry in Karnataka: establishment of a training centre in Hubli by the South Indian Textile Research Association, deferment of sales tax on cotton yarn for three to five years, exemption of purchase tax on local cotton, exemption of entry tax and sales tax on high-speed diesel used by mills for captive power generation and extension of financial support towards working capital for mills.

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