'Streamline roles of CCI and NAFED on cotton'

With the Centre busy formulating a National Fibre Policy, the predominantly cotton-based Indian Textile industry, particularly the Southern region, wants the Government to streamline the roles of Cotton Corporation of India (CCI) and NAFED on the procurement and sales policy.    

This was necessary to ensure that the benefits reached only cotton farmers and industry and not the handful of traders, as happened during the current cotton season, two major industry associations said.    

The Southern India Mills' Association (SIMA) and South India Small Spinner Association (SISSPA) wanted union textile minister Dayanidhi Maran to take steps to revamp minimum support price (MSP) for raw cotton on a scientific basis, so that the interests of both the farmers and the textile mills were taken care of.    

CCI and NAFED have procured huge quantity of cotton from farmers during the season and were offering huge discounts only to bulk buyers like big corporates and traders, thus depriving the benefits to farmers or the industry, SISSPA President, G Soundarajan said.   

With raw material — cotton — accounted for 55 to 65 per cent of producton cost, SIMA wanted the government to withdraw five per cent export incentive offered for cotton, which only benefited competing countries like China, Pakistan, Thailand and Bangladesh, its deputy chairman, J Thulsidharan said.

Stating that the government should revamp and revise MSP suitably to benefit both farmers and industry, the industry wanted the government to consider increasing input subsidies and other benefits to the farmer, rather than increasing MSP.    

They wanted steps to withdraw import duty and Central excise duty on man made fibre, including their intermediaries to benefit the weaker sections.   

Since cotton textiles have become expensive,poorer sections of society could afford only synthetic textiles. Currently consumption of cotton and synthetics textiles in India was in 60:40 ratio, as against the reverse globally, they said.    

Considering the undue delay in reimbursing Technology Upgradation Fund interest subsidy of Rs 2220 crore and eroding the working capital of mills, the government should either make the interest subsidy as nett of interest or convert all government dues into working capital margin Money, they added.     

Urging the ministry to announce mega clusters to develop weaving processing sectors, it said that processing was the weakest link in the texile value chain and that existing schemes were not adequate to strengthen procesing.   

The associations also wanted a special scheme for marine discharge for disposing the treated textile effluents.

On power, the associations said that the Tamil Nadu textile industry, which accounted for one third of textile production in India, was facing around 50 per cent power shortage and the trend was likely to continue for three years.    

The industry needs to achieve 85 per cent capacity utilisation to avoid sickness and 90 per cent capacity utilisation to break even, they said, adding that with the current level of power availability, production cost was higher by 20 per cent. The industry required adequate power to sustain the huge capacity and employment.   

There were signs of recovery of the industry after nearly two years of recession, the associations said, adding that if industry wanted to take advantage of this, there was the need for a long-term strategy and comprehensive package to achieve targets set for the 11th five year plan.