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ORGANISED TEXTILE MILL INDUSTRY
Cotton/ Man-made
Fibre Textile Mill Industry is the single largest organised industry in
the country employing nearly 10 lakh workers. Besides this, there are a
large number of ancillary industries dependant on this sector such as those
manufacturing various machinary, accessories, stores, ancillary and chemicals.
Even on a modest assumption that a worker’s family comprises five persons,
the direct dependants on the organised textiles mill industry itself work
out to about 50 lakhs. The salient aspects of this industry are discussed
in the following paragraphs.
CAPACITY The Indian Textile
Industry has witnessed a phenomenal growth during the last decade. The
spindleage increased from 28.60 million in 1994 to 34.90 million and rotors
from 1.39 lakh in 1994 to 3.91 lakh as on November 1999 and it is expected
to reach a figure of 35 million and 4 lakh respectively by the end of March
2000. The loomage however, declined from 1.50 lakh in March 1994 to 1.23
lakh in November 1999 in the organised sector. The growth in capacity in
spinning and weaving sectors of the industry since 1994 is given in the
table below.
Out of 1837 cotton/man-made
fibre textile mills as on 30-11-99, 192 mills are in the public sector,
154 mills in the co-operative sector and 1491 mills are in the private
sector.
CAPACITY UTILISATION The capacity utilisation
in the spinning sector of the organised textile mill industry decreased
from 84 percent in 1993-94 to 79 percent in 1998-99, but is expected to
increase to the level of 83% during the year 1999-2000, while the capacity
utilisation in the weaving sector of the organised textile mill industry
has remained between 51 to 54 percent during the last six years. A statement
giving the capacity utilisation in cotton / man-made fibre textile mills
is as given in the table on the next page.
PRODUCTION OF SPUN YARN The production of spun yarn has increased from 2142 million kgs. during 1993-94 to 2808 million kg. during 1998-99. The production of spun yarn during the period April 1999 to October, 1999 is provisionally estimated at 1751 mn. kg. This is anticipated to be 3020 mn. kg. during the year 1999-2000. The above data include the production of yarn from SSI spinning sector as well. The contribution from the SSI sector has been about 4% in the total spun yarn production. A statement showing the production of spun yarn (including SSI units) during the last six years along with anticipated figures for the current year is as under:
The pattern of production
of cotton yarn during the last six years along with the anticipated figures
for the current year is given in the table below.
SICKNESS/CLOSURE OF TEXTILE MILLS As on 30-11-99, there were 1837 mills, consisting of 1555 spinning mills and 282 composite mills. Out of this, 333 Cotton/Man-made fibre textile mills (229 Spinning and 104 Composite) with an installed capacity of 7.94mn. spindles, 29,118 rotors and 60,734 looms were reported to be closed. As on 31/03/99, 313 mills (207 spinning and 106 composite) with installed capacity of 7.49 mn. spindles, 25534 rotors and 606 hundred looms were reported closed as on 30.9.99. The incidence of
sickness and closure in the organised textile industry has been a matter
of concern. One main reason of sickness is structural transformation resulting
in the composite units in the organised sector losing ground to power looms
in the decentralised sector, on account of the latter’s greater cost effectiveness.
The other causes of sickness/closure of the industry include low productivity
due to lack of modernisation, stagnation in demand and inability of some
units to expand in the export market, increase in the cost of inputs, difficulties
in getting timely and adequate working capital, etc. The details of closure
of cotton/ man-made fibre textile mills is given in the table below.
MEASURES TAKEN BY THE GOVERNMENT TO TACKLE THE PROBLEM OF SICKNESS I) Setting up the
of Board for Industrial and Financial Reconstruction (BIFR) for timely
detection of sickness and potentially sick companies and for taking preventive,
ameliorative, remedial and other measures which need to be taken with respect
to such companies.
BOARD FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION (BIFR) As per the information
obtained from the Board for Industrial and Financial Reconstruction, there
were 421 cases of textile mills registered with BIFR as on 9/9/99. Number
of mills State-wise registered with BIFR is given in the tables on the
next page.
TEXTILE WORKERS’ REHABILITATION FUND SCHEME (TWRFS) Textile Workers’ Rehabilitation Fund Scheme came into force with effect from 15th Sept. 1986. The objective of TWRFS is to give interim relief to the worker rendered jobless due to permanent closure of the mills in the private sector. Relief under the scheme is available only for 3 years on a tapering basis, 75% of the wage equivalent in the first year, 50% in the second year and 25% in the third year. Criteria for mills’ eligibility: i) A closed textile mill should be licensed under the I (D & R) Act,1951 or registered with Textile Commissioner as a medium scale unit on the date of the closure. ii) The mill should have obtained the requisite permission for closure from the appropriate State Government under Section 25(0) of the Industrial Disputes Act., 1947, or should be taken over by Official Liquidator appointed by the High Court, and iii) The unit should have closed down on or after 6th June, 1985. By an amendment, TWRFS is also now made applicable to the cases of partial closure on a case to case basis. Partial closure is restricted to cases-wherein the State Government recommends that an entire uneconomic activity be scrapped as a part of rehabilitation package for sick/weak mill (as per RBI definition) approved by Nodal Agency/BIFR, provided the scrapped capacity is surrendered for cancellation and endorsement is made on the licence/Registration certificate to that effect. In both the cases (i.e. permanent closure and partial closure) the scheme is applicable to workers who have been earning wage equivalent upto Rs.2,500/- per month. The following conditions are necessary for workers to become eligible for getting relief under TWRFS: i) The workman should have been continuously employed for 5 years in the closed textile units as on the date of closure; and ii) He should be on the records of the Regional Provident Fund Commissioner. Since the inception of the Scheme as on 28.11.1999, 29 units in Gujarat, 4 units in Tamil Nadu, 1 unit in Delhi, 3 units in Maharashtra and 1 unit in Madhya Pradesh making a total of 38, were found eligible under the scheme. A total of 57,280 workers of 36 mills out of the above 38 units have been disbursed relief of an amount of Rs.120.23 crore upto 28.12.1999. During the current
financial year, i.e.1999-2000 upto 28.12.1999, Government has released
Rs.15.00 crore, of which an amount of Rs.86,401,860/- covering 2649 workers
has already been disbursed. Thus, the total amount disbursed since the
inception of the scheme stands at Rs.120.23 crore, as on 28.12.1999 covering
57,280 workers of 36 units.
TECHNOLOGY UPGRADATION FUND SCHEME. (TUFS) Government of India, Ministry of Textiles have launched a Technology Upgradation Fund Scheme (TUFS) for the Textile and Jute Industries which is in operation since 1/4/99 for 5 years i.e. upto 31/3/2004. There is no cap on funding under this scheme. It is an open-ended scheme depending on the capacity of the industry to absorb funds in bankable and techno-economically feasible proposals. The main features of the scheme are given below: i) The scheme will provide a reimbursement of 5% point on the interest charged by the lending agency on a project of technology upgradation in conformity with the scheme. ii) The identified sectors in the textile industry viz. Cotton ginning and pressing; silk reeling and twisting, wool scouring and combing, synthetic filament yarn texturising, crimping and twisting, spinning; manufacturing of viscose filament yarn (VFY); weaving/knitting including non-woven, fabric embroidery, technical textiles, garments/made-up manufacturing; processing of fibres, yarns, fabrics, garments and made-up and Jute industry are eligible to avail of these concessional loan & for their technology upgradation requirements. Investments in common infrastructure or facilities by an industry association, trust or co-operative society in an industrial estate and other specified investments are also eligible for funding under the scheme. iii) Technology levels are bench marked in terms of specified machinery for each sector of the textile industry. Machinery with technology levels lower than that specified will not be permitted for funding under the TUF Scheme. iv) General eligibility condition and sector specific eligibility conditions have also been specified in the scheme. v) Nodal agencies for the scheme are as follows: For the Textile Industry (excluding SSI Sector) : IDBI For the SSI textile sector : SIDBI (Cotton ginning & pressing weaving knitting, processing & garmenting manufacturing) For Jute Industry : IFCI vi) The SIDBI has co-opted 127 Financial Institutions comprising of 18 State Financial Corporations, 17 State Industrial Development Corporations, 11 Twin Function Industrial Development Corporations and 81 commercial banks for wider and effective reach of the scheme to all sectors of the textile industry, including the de-centralised sector. Similarly, IDBI has co-opted 58 financial institutions (18 SFCS, 17 SIDCS, 11 Twin function SIDCS and 14 scheduled Commercial Banks). Further, Exim Bank has also been co-opted by both IDBI & SIDBI. vii) The functioning
of the scheme is being periodically monitored by an Inter-Ministerial Steering
Committee, chaired by Secretary (Textiles). The progress of sanction and
disbursement under the scheme is given in the following table.
BOB - Bank of Baroda UBI - Union Bank of India SBI - State Bank of Indore HFC - Haryana Financial Corporation Note: (ii) Information in respect of other PLIs is still awaited. (iii) Exim Bank sharing 3 cases with IDBI. (iv) IFCI is sharing one case with IDBI. (v) Information in
respect of ICICI as on 30.09.1999.
The weaving capacity
in the organised mill sector had been stagnant for a number of years. The
situation has not changed even with the removal of restriction in the creation
of capacity in the textiles sector as permitted by the Textile Policy of
1985. The production of cloth in the mill sector in 1998-99 was 1785 mn.
sq. mtr. as compared to the production of 1990 mn. sq. mtr. in 1993-94.
The production of cloth in the mill sector is projected at 1587 mn. sq.
mtr. in 1999-2000. The data on production of cloth in the mill sector,
the handloom sector, hosiery sector & the power loom sector during
the past six years are setout in the table given on the next page. The
employment generation in cotton/man-made fibre textile industry as on 30/11/1999
was 10.41 lakh.
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