Textile yarn manufacturing mills in the region today urged Union Textiles Minister, Smriti Irani to take steps to reduce the Hank Yarn Obligation from 40 per cent to 10 per cent and enable ease of doing business for the cotton textile industry.
In identical letters to the minister, managing directors of nearly 400 such mills said in the post-GST era, the demand for hank yarn has drastically reduced as both cone yarn and hank yarn have been brought under the same rate of five per cent GST.
In view of this, spinning mills were not in a position to market the hank yarn and fulfil the obligation after the implementation of GST, which might lead to severe penal action against these mills as the obligation is covered under the Essential Commodities Act, they said.
Considering this, an urgent policy intervention in this regard was very much essential to prevent such consequences, as these kind of unrealistic restrictions were making the mills globally uncompetitive despite the ministry's efforts to promote exports, they said.
As per the third census 2009-10, the number of working handlooms in the country was at 21.47 lakh, compared to 36.10 lakh during 1987-88.
"On the other hand, the cotton yarn production has increased by 133 per cent from 1,321 million kg in 1987-88 to 3,079 million kg in 2009-10," they said.
"However, number of handlooms in operation in the country have reduced by about 41 per cent. During 2016-17, the spinning sector produced 4,061 million kg of cotton yarn, registering an increase of 207 per cent as compared to 1987-88.
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