Shri Dhindsa said that per capita consumption of synthetic fibre, it is envisioned, would rise from the current level of about 1.6 kg to 3 kg by the end of the 10^th plan i.e. the year, 2007. If the factors constraining the growth of synthetic fibres are addressed, synthetic fibre sector can play a much bigger role in meeting the clothing requirement of the people. The consumption of synthetic fibres/yarns during the last 10 years has grown at the rate of 13% which is about twice the GDP growth rate, and it is currently estimated at 1.6 million tonnes. Despite very high demand in the growth of synthetic fibres, our per capita consumption is much below the world average. Considering the near stagnant availability of natural fibres, coupled with increase in demand of clothing for our population, synthetic fibres would have to play an increasingly important role, the Minister added.

    The Minister further stated that the domestic synthetic fibre industry is regarded as a high cost industry because it suffers from handicaps like high cost of capital, high import duty on capital goods, lack of availability of clean and continuous power at competitive rates and infrastructural constraints. Further, the domestic industry is fragmented, most of the plants are of sub optimal size and based on outdated technology. Moreover, the prices of synthetic fibres have remained high because of the incidence of high excise duty. For example, excise duty on polyester filament yarn is 36.8% which is higher than the excise duty levied even on luxury cars. On other types of synthetic yarn and blended yarn, excise duty of 18.4% is levied. In contrast, excise duty on cotton yarn is only 9.2%. Such distortions in duty structure would require rationalization so that synthetic fibres can realise their full potential.

    The members who attended the meeting were – Shri A.C. Jose, Shri Baju Ban Riyan, and Shri Anwarul Haque (Lok Sabha); Shri Mahendra Prasad and Shri Manoj Bhattacharya (Rajya Sabha).