TEXTILES MINISTRY- ON MODERNISATION
PATH
The textile industry’s predominant presence in
the Indian economy manifests in its contribution to the industrial
production, employment generation, and foreign exchange earnings.
Currently, it adds about 14 per cent to the industrial production
and about four per cent to the GDP. It provides employment to
about 35 million persons. Together with allied agriculture sector,
it provides employment to over 90 million people. The contribution
of this industry to the gross export earnings of the country is
over 27 per cent while it adds only 7 to 8 per cent to the gross
import bill of the country.
NATIONAL TEXTILE POLICY-2000
To prepare the textile Industry to meet the challenges
of integration with the world textile market, the National Textile
Policy-2000 (NTxP-2000) was announced on November 2, 2000. Aimed
at creating new opportunities for growth with global market being
more accessible to trade, several initiatives for modernisation
and investment for growth have begun to create the conditions
necessary to achieve the objective of the policy. This aims at
developing a strong and vibrant textile industry capable of producing
quality cloth at an acceptable price, contributing increasingly
to the provision of sustainable employment and economic growth
of the country and competing with confidence for an increased
share of global market.
As follow-up measures for implementation of NTxP
2000, following initiatives are taken:
Textile Package
In General Budget 2001, the Textile Package was
announced with following provisions:-
- A scheme for setting up of Integrated Apparel Parks was initiated.
This will enable the de-reserved readymade garment industry
to set up modern units with excellent infrastructure. Budget
provision of Rs. 10 crore was made for the year 2001-2002.
- At least 50,000 new shuttleless looms and the modernisation
of 2.5 lakh plain looms to automatic looms is expected to take
place by 2004 through funding from the Technology Upgradation
Fund Scheme (TUFS).
- The Budget allocation for Ministry of Textiles was enhanced
substantially from Rs 457 crore in 2000-2001 to Rs 650 crore
in 2001-2002.
- The provision for the TUFS was enhanced to Rs. 200 crore in
2001-2002, and incentive for modernisation offered by enhancing
depreciation rate of machinery installed under the scheme to
50 per cent per annum.
- Duty on specified textile machinery, textile items was restructured
by removing 10 per cent surcharge and customs duties on raw
materials were reduced.
Conference of State/UT Ministers and Secretaries
incharge of Textiles
A conference of State/ UT Ministers of Textiles
was held in April, 2001 to discuss issues important for the effective
implementation of National Textile Policy-2000. It was decided
to continue focus on development of the decentralized industry
in the North-Eastern Region.
Reconstitution of Development Council for Textile Industry
The Development Council for Textile Industry
was reconstituted on February 13, 2001 for a period of two years.
This 25 member advisory body under the chairmanship of Minister
of Textiles, met thrice during the year. Its recommendations touched
on measures necessary for technological upgradation, capacity
utilisation, availability of raw material, training or retraining
of persons engaged in the industry, enhanced scientific and technical
research, standardisation of products, and the collection of statistics
from such industry for development of a database for a economic
planning.
Official Group for Growth in Textiles
An Official Group for Growth in Textiles (OGGTx)
was constituted under the chairmanship of Finance Secretary with
Secretary (Revenue), Secretary (Expenditure), Secretary (Textiles),
Director General of Foreign Trade, and Additional Secretary (Banking)
as Members, to periodically review the progress and address related
issues such as duty structure, flow of funds including credit,
duty drawbacks rates and DEPB issues etc.
Steering Group on Investment and Growth in
Textile Industry
A Steering Group on Investment and Growth in
Textile Industry (SGIGTI) has been constituted under the Chairmanship
of Shri N.K.Singh, Member, Planning Commission with Secretary
(Textiles), Secretary (Revenue), Secretary (Labour), Secretary
(Chemicals & Petro Chemicals), Additional Secretary (Banking),
Director General of Foreign Trade, and representative of CII,
FICCI and ASSOCHAM as members. The objective is to periodically
review and monitor the implementation of policies, programmes
outlined in NTxP-2000 and devise further measures for attracting
requisite investments and growth in textile sector review export
scenario and identify measures to enhance export competitiveness
of Indian textiles, particularly in the post–2004 period and evolve
a growth oriented fiscal policy for integrated development of
the textile industry covering all its segments.
Constitution of an Inter-Ministerial Task
Force
An Inter-Ministerial Task Force, under the chairmanship
of Secretary, Textiles, has been constituted in May, 2002, to
study the Interim Report furnished by the Steering Group on Investment
and Growth in Textile Industry, SGIGTI to review the existing
labour laws, assess the credit requirements for the modernisation/
revival of textile industry, assess the availability of institutional
credit and to suggest measures for assuring adequate flow of funds
to the textile industry.
Apparel Parks for Exports
In March, 2002, the Government launched a new
scheme viz. ‘Apparel Parks for Exports’ for imparting focused
thrust for setting up of apparel manufacturing units of international
standards at potential growth centres. Till date, the Government
has sanctioned seven apparel park projects in different States.
Textile Centre Infrastructure Development Scheme
The Government has also launched a new scheme
titled ‘Textile Centre Infrastructure Development Scheme (TCIDS)’
for modernising infrastructure facilities at major textile centres
of the country in March, 2002. The scheme is not location specific
and all the States and Union Territories (UTs) have been requested
to formulate and furnish project reports for bridging critical
gaps in infrastructure of major centres in their respective States/UTs,
which can be considered for assistance under the Scheme.
Textile (Development & Regulation) Order,
2001
In the wake of liberalisation and the need for
dismantling controls and restrictions, the Government has amended
and issued the Textiles (Development & Regulation) Order,
2001 under Section 3 of the Essential Commodities Act, 1955, to
supersede the earlier Textile Control Order of 1993. The new order
makes the Government machinery more industry friendly and less
obtrusive.
Textile Upgradation Fund Scheme
One of the important targets of the NTxP-2000
is vigorous implementation of Technology Upgradation Fund Scheme
(TUFS). Launched on April 1, 1999, it aims to provide impetus
to the modernisation of textile and jute industry. A 22- member
Inter-Ministerial Steering Committee monitors and reviews the
scheme on a regular basis. On the basis of feedback from the Technical
Advisory-cum- Monitoring Committee and industry associations,
necessary modifications are made in the scheme to improve the
access of the scheme. To make more and more textile SSI units
avail of the benefits under TUFS the option to avail of upfront
12 per cent credit link capital subsidy has also been provided
recently. The regional offices of Textile Commissioners have been
holding facilitation camps so that more industrial units, including
powerlooms, can make use of the scheme. Till March, 2002, a total
of 1,598 applications were received, out of which 1,369 have been
sanctioned with an amount of Rs. 5,140.82 crore as loan. So far,
Rs. 3,412.48 crore has been disbursed to 1,074 cases.
SERICULTURE
Recent R&D Work
The last two years of the IX-Plan witnessed a
breakthrough in R&D by Central Silk Board in:
- tropicalising the inherently temperate bivoltine silkworms;
- developing host-plants with significantly high leaf yields
for mulberry silkworms;
- perfecting a package of practices for raising productivity
at each stage of cocoon production, including pest management,
disease control, development of more efficient rearing and cocooning
equipment, eco-friendly methods of rearing, and efficient recycling
of silkworm bed refuse; and
- developing and popularising reeling and reeling-cum-twisting
machines and spinning wheels for reeled and spun silks with
better ergonomics, efficiency and productivity.
Introduction of New Package for High Quality
Silk
Development of a sericulture package for gradeable
quality of bivoltine mulberry silk has added to the prospects
of the industry, which is hoped to bring a significant rise in
production and quality of silk. The high tensile strength of bivoltine
silk adds to its other advantages by making possible the use of
multi-end reeling machines and modern fast powerlooms, thus promising
an increase in quality and productivity along the entire value-chain.
A strategy for growth has been put into the field
for development of bivoltine sericulture. This is expected to
spur the yields from the current level of about 750 Kg of cocoons
from a hectare of mulberry plantation to over 1,600 Kg by the
end of Xth-Plan. Already bivoltine silk production has increased
from 370 tonne in 1999-2000 to 575 tonne in 2000-2001, the yield
for 2001-2002 is 750 tonne (provisional).
Technology Mission on Cotton
Considering the importance of cotton crop in
the national economy, the Government of India has launched a Technology
Mission on Cotton (TMC) from February, 2000 to address the issues
of low productivity and contamination.
The Mission consists of four Mini Missions,
which are being jointly implemented by the Ministry of Agriculture
and Ministry of Textiles with the following objectives:
Mini Mission I : Cotton research and technology
generation.
Mini Mission II : Transfer of technology
and development.
Mini Mission III : Improvement of marketing
infrastructure.
Mini Mission IV : Modernisation/Upgradation
of ginning and pressing
factories.
Mini Missions I & II are being implemented
by the Indian Council of Agricultural Research (ICAR) and Ministry
of Agriculture, respectively, while Ministry of Textiles is the
nodal agency for implementation of Mini Missions III & IV.
Upto July, 2002, under Mini Mission-III, 44 project proposals
have been sanctioned. The total estimated cost is Rs. 159 crore
out of which Government share would be Rs. 80 crore. Under Mini
Mission-IV, modernisation of 187 ginning and pressing factories
have been sanctioned at an estimated cost of Rs. 223 crore out
of which Government share would be Rs. 38 crore.
Modernisation of the Weaving Sector
Pursuant to the textile package, a programme
for modernisation of the decentralised powerloom sector by 2004
has been drawn up. The main instrument in the implementation of
this programme is the TUFS, which has been modified to allow the
beneficiary the option of taking a 5 per cent reimbursement of
loan rate, or, a 12 per cent subsidy upfront linked to credit.
The lead implementation agency is the Powerloom Service Centres
(PSCs), which are being modernised and will be strengthened to
carry out a facilitation role. A cluster approach is being followed
and 16 major powerloom clusters have been identified to make a
focused effort for modernisation. The State governments’ coordination
has been emphasised; SIDBI and the banks are being drawn into
the programme, office of the Textile Commissioner is the managing
organisation. Funds for modernisation programme for 2.5 lakh looms
are provided in the budget as part of the provision for TUFS.
Funds in the powerloom head of the budget have been provided for
modernising the PSCs and for welfare schemes of group insurance
and work-sheds.
Baba Saheb Ambedkar Hastshilp Vikas Yojana
A new scheme ‘Baba Saheb Ambedkar Hastshilp
Vikas Yojana’ has been formulated which has essentially a people-centric
approach and involves mobilisation of the artisan community in
important craft clusters all over the country into Self Help Groups
and Thrift & Credit Societies. Symposia on AHVY for the crystallisation
of critical issues and adoption of implementation module for the
scheme were organised at Jaipur, Bhopal, Lucknow and Kolkata.
DRDA, SIDBI, NABARD, Planning Commission, prominent NGOs and experts
in the field of handicrafts anchored the symposia.
Deen Dayal Hathkargha Protsahan Yojana
The Government launched an integrated and comprehensive
scheme the ‘Deen Dayal Hathkargha Protsahan Yojana’ in April,
2000 to provide assistance for the entire gamut of handloom sector
activities, like product development, infrastructure and institutional
support, training to weavers, supply of equipment and marketing
support etc., for weavers within or outside the cooperative fold,
both at the micro as well as the macro level. The scheme will
be in operation till the end of the 10th Five Year
Plan. The outlay envisaged is Rs. 690 crore, involving Central
share of Rs. 360 crore to be given to State governments on submission
of project proposals.
Exports
Various steps have been taken to boost exports.
These include de-reservation of woven segment of readymade garments
from SSI, enhancement in the SSI investment limit for hosiery
and knitwear sector from Rs 1 crore to Rs.5 crore, rationalisation
of fiscal duty structure, reduction in custom duty to 5 per cent
on specified textile and machinery items, accelerated depreciation
for machinery covered under TUFs etc.
The Garment and Knitwear Quota Policy is amended
from time to time to align some of its provisions to the emerging
situation and to make them more transparent and exporter friendly.
A notification was issued in April, 2001 regarding submission
of proof of shipment in respect of First Come First Served (FCFS)
quota.
Bed linen anti-dumping case with European Union
European Union (EU) had imposed definitive
anti-dumping duty ranging from 11 per cent to 24 per cent on imports
of cotton type bed linen originating from Egypt, India and Pakistan
w.e.f. December 5, 1997. Since India and EC could not reach a
mutually satisfactory resolution on India’s request the DSB of
WTO formed a Panel. The Panel submitted its final report on October
30, 2000. The Panel observed that EC acted inconsistently with
its obligation under Articles 2.4.2, 3.4 and 15 of the Anti-dumping
Agreement. Aggrieved by the decision of the Panel, the EC decided
to file an appeal with the Appellate Body. The Appellate Body
decided in favour of India. The DSB findings were adopted on March
14, 2001. India and EU also agreed to extend implementation period
till August 14, 2001. EU has since suspended collection of anti-dumping
duties from export of bed linen from India.
Jute
For ensuring the percentage of mandatory packaging
in jute bags for sugar and foodgrains to 100 per cent each, the
Government issued an order on September 1, 2001 under the Jute
Packaging Materials (compulsory use in packing commodities) Act
1987(JPM). Urea had been excluded from the purview of the JPM
Act. In October, 2001, the Government has directed all manufacturers
of jute textiles to mark the country of manufacture/origin of
specified items of jute textiles. The Government has also constituted
an Inter-Ministerial Committee for formulating a road map for
progressive dilution of compulsory packaging norms for food grains
and sugar under the JPM Act.
Textiles in North Eastern Region
Following the adoption of Prime Minister’s
Package for development of the region, special focus is being
given to implementation of textiles and textile-based activities,
like handicrafts, handlooms, sericulture and jute in the North
Eastern Region. The important follow up actions taken in this
regard include raising the share of Central assistance (excluding
for marketing) from 75 per cent to 90 per cent for all Centrally
sponsored Plan schemes, as well as strengthening the North Eastern
Handicrafts & Handlooms Development Corporation (NEHHDC).
It is now under the administrative control of the newly created
Department of Development of North Eastern Region (DONER). During
the Ninth Plan a provision of Rs. 42 crore was made and an amount
of Rs. 41 crore spent on the development schemes being implemented
in the North Eastern Region. For the current year a total provision
of Rs. 47 crore has been made.
