REDUCTION OF COST OF PRODUCTION IN
COTTON TEXTILE INDUSTRY
The Government had
approved a proposal of the Cotton Textile Exports Promotion Council
(TEXPROCIL) for conducting a study on "Benchmarking of Costs of
Production of Textiles in India vis-à-vis China, Pakistan,
Indonesia, Bangladesh and Sri Lanka" through Zurich based professional
consultancy firm Gherzi Textil Organisation. The main findings
of the study include :-
- India’s very low productivity
(yield per hectare) results in higher cost of raw cotton.
- Power cost plays an important
role more due to the factor cost, in the manufacturing cost
of cotton textiles.
- Inadequate investment across the
value chain restricting growth of technologically upgraded capacity
and the quality of out-put of the cotton textile industry, possible
due to relative high cost of capital.
- If the current scenario continues,
industry’s present market share in the global market may shrink
and may lead to adversely impact the domestic market.
It is for the individual
units to explore the possibilities for decreasing the cost of
production by adopting various measures in order to remain competitive
in the international market.
Measure taken by
the Government to improve competitiveness of Indian textile industry
include :-
- Technology Mission on Cotton launched
to improve the productivity of cotton.
- Technology Upgradation Fund Scheme
(TUFS) introduced to facilitate availability of capital for
projects of modernisation and upgradation of textile sector
at competitive rates.
- Accelerated depreciation for the
machinery acquired with TUFS benefits.
- Stand alone power plants have
been included under TUFS.
- Rationalisation of DEPB rates
for certain textile products, and
- Rationalisation of duty structure
in the textile sector.
In order to remain
competitive in international market it is desirable to utilise
all resources optimally and reduce production costs without compromising
the quality. Production cost of any industry including textile
industry fluctuates in tandem with general inflation rate in the
economy having a bearing on the cost of its inputs. Production
cost also varies from unit to unit of the same industry depending
on the management decisions.
This was stated by
the Minister of State for Textiles, Shri Basanagouda R. Patil,
in reply to a question by Shri Lajpat Rai and Shri Ram Jethmalani
in the Rajya Sabha today.
