Textile mills clarify

By Our Special Correspondent

CHENNAI, FEB. 5. The Southern India Mills' Association (SIMA) has argued that small scale units have ``sprung up with absolutely no inherent techno-economic advantages after excise relief was given to them".

Responding to a statement from the small mills, SIMA's Chairman, Mr. Manikam Ramaswamy, argued ``The modus operandi is either by fragmenting the existing mills or creating new entities with very old second-hand machinery or under-invoiced reasonably old machinery, as it is impossible to create a viable spinning mill in small scale".

He said 936 small scale mills had come up during the past two years, mainly in Tamil Nadu, enjoying at least Rs. 83 crores of excise duty exemptions and Rs. 80 crores of contribution from the working community - in terms of difference in wages between small scale and medium scale industry for 30,000 employees.

``It is surprising to note the figures mentioned by ;them - interest-free sales tax of Rs. 1.59 crores, Modvat credit of Rs. 48 lakhs, totalling Rs. 2.55 crores - in an industry which pays almost Rs. 500 crores as excise duty and sales tax of over Rs. 250 crores, this figure appears really insignificant, even if it is true", Mr. Ramaswami noted.

The SIMA chief said ``Pressed against the wall due to unequal competition, huge benefits given to unviable sector of the textile industry, many large scale mills have started evading excise duty either by wrongly declaring cone yarn as hank yarn or by doing a part of the business outside the books and we are afraid the very morality of the spinning sector will get eroded if this rampant evasion, motivated by today's ill-advised policies, is not corrected".

CHENNAI: ESS to explore Japanese markets: Eastern Software Systems (ESS), e-business software provider, has been invited to participate in the International Techno Business Forum being held between February 1 and 9 in Japan. Organised by JETRO International Tech Business Forum is an annual event to create business opportunities between overseas and Japanese companies, says a release.

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