Losing out to Gujarat

STATE UPDATE/MAHARASHTRA

The facts are disquieting. When it comes to exports, Maharashtra's cotton textile, apparels and powerlooms industries have been losing out to Gujarat.

You don't believe it? Listen to R.K. Das, joint chief executive officer (environment)of the Maharashtra Industrial Development Corporation (MIDC): "The Aurangabad region has seen a decline in exports of Rs 150 crore to Rs 160 crore annually for the last three years. Similarly, the Sholapur belt has lost business of Rs 300 crore to Rs 350 crore over the last three years owing to the decline in exports from the region."

But, says Das, textile exports from Gujarat's Ankleshwar industrial region have jumped by as much as Rs 450 crore over the last five years. Exports from the textile regions of Vapi and Bharuch in Gujarat too have soared.

The explanation is simple: European Union (EU) officials have been regularly visiting textile mills in Maharashtra and other Indian states to assess their compliance with EU environmental regulations.

EU countries, all of whom are signatories to the World Trade Organisation's multi fibre agreement, insist on compliance with environmental regulations as a pre-requisite to trade.

"Ankleshwar's textile industry already boasts of common affluent treatment plants (CATP), solid waste management plants, drainage systems and even creches for worker with infants. This has resulted in increased textile exports from this region over the last five years by Rs 450 crore," says Das.

On the other hand, textile mills and powerlooms in Maharashtra's Sholapur and Aurangabad belts don't provide creches, don't have CATPs, don't have solid waste treatment facilities and do not meet European drainage standards. In addition, child labour is prevalent in these regions ""-a no no as far as exports to Europe and the US is concerned.

Not everyone agrees with Das. Says Arvind Poddar, joint managing director of Siyaram Silk Mills: "Textile mills in Surat and Ankleshwar are predominantly polyester based, and manufacture sarees. The Sholapur mills make cotton or syntheticsuiting and shirtings. It is true that there has been a decline but WTO compliance issues are not the major issues. The main issue is governmental policy," he says.

According to Poddar, the Centre's withdrawal of duty drawback from 200-2001 has set the industry back by Rs 400 crore. Other textile men, meanwhile, imply that Maharashtra hasn't provided the right business climate.

Raju Goyanka, a former chairman of the Apparel Export Promotion Council, which represents the interests of garment makers, says that in the last three years his businesses in Bangalore and Tirupur have expanded capacity by 200 per cent.

"Tirupur accounts for Rs 6,000 crore of the Rs 30,000 crore worth of annual apparels exports from India. Infrastructure, competitive power tariffs and affordable property are available there. Similar is the case in Bangalore," he says.

That point is backed by Ganesh Kumar Gupta, chairman of a textile committee set up by the Maharashtra government. "Even though the state government has lately been pursuing certain projects to give a fillip to the textile, apparel and powerloom industries, its taxation norms (five per cent sales tax on the total DEPB refunds, octroi and power tariffs) are responsible for the flight of textile units from the state."

Still, most textile industry men acknowledge that Maharashtra's textile industry has not upgraded technology. " The quality of water plays a crucial role for textile processing units as it directly impacts the quality of the fabric coming out of textile processing houses. People are just not investing in upgrading their plants. In our case (Siyarams), we constantly keep upgrading our facilities," Poddar says.

Das agrees. "Take the powerlooms at Bhiwandi, Ichalkaranji or Solapur where the situation has gone from bad to worse. Obsolete technology is still used in these powerloom townships. Power failures are more the rule than the exception. The poor quality of water here is responsible for the fibre produced here having no international demand."

He explains that the total dissolved solids (TDS) in the water are high in Solapur impacts. This affects the quality of the fabric that is processed using this water.

The Maharashtra government is aware of all this. It is launching several ambitious projects. Says Das: "The Textile Centre Infrastructure Development Scheme that the Centre has sanctioned (Rs 20 crore for developing the infrastructure for the Sholapur and Chincholi textile clusters that house some 1,500 textile units), will provide the infrastructure and other high investment requirements that cannot be borne by individual textile units themselves."

The Centre has in principle cleared a similar textile cluster in Butibori. Similarly, three other apparel park schemes at Airoli, Butibori and Ambernath for providing water, quality power, CATP and state of the art machinery are awaiting the Centre's clearance.

For powerloom units at Sholapur, a powerloom weavers scheme seeks to set up a weavers' park 18 kilometers away at Chincholi. Similarly, in Butibori a park is being sought to be created for the 750-odd families residing in nearby Mominpura.

Sholapur's municipal commissioner S Srinivasan weighs in: "We have started improving the infrastructure. Some 80 per cent of the road works in Sholapur have been completed in the last six months."But the textile industry is scornful about such pronouncements.

Says Gupta: "Everything is on paper. We also have to witness labour law amendments in the state and rationalised power tariffs. Last week Reliance Energy announced that it would be selling power at the rate of Rs 2 per unit in Uttar Pradesh.

In Mahrashtra we spend nearly three times that on power. The ground level position for the three textiles segements in Maharashtra is bleak. Those that are operating are doing badly.

None of them is openly talking about their financial state as they do not want to alarm their bankers and suppliers." Clearly, the state government has promises to keep and miles yet to go.