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CHAPTER III 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 dependent on this sector such as those manufacturing various
machinaries, accessories, stores, ancillary and chemicals.
Even on a modest assumption that a worker’s family comprises five
persons, the direct dependents
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 four decade. The
spindleage increased from 11 million in 1951 to over 35.41 million and rotors
from 45 thousand in 1989 to 395 thousand as on 31.12.2000. The loomage however, declined from 1.50 lakh
in March 1994 to 1.23 lakh in
Dec., 2000(P) in the organised sector.
The growth in capacity in
spinning and weaving sectors of the industry since 1994 is as
mentioned in Table 3.1. Out of 1842 cotton/man-made fibre textile mills as on 30-12-2000,
192 mills are in the public sector, 155 mills in the co-operative sector and
1495 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 it again increased to the level of 83% during the year 1999-2000(P), while the capacity utilisation in the weaving sector of
the organised textile mill industry has remained between 51 to 56 percent
during the last six years. A
statement giving the capacity utilisation in cotton /
man-made fibre textile mills is as mentioned in Table 3.2. Table 3.1
Table 3.2
PRODUCTION OF SPUN YARN The production of
spun yarn has increased from
1652 million kgs. during 1989-90
to 3046 million kg. during
1999-2000. The production
of spun yarn during the period April 2000 to December, 2000 is provisionally
estimated at 2379 mn. kg. The above data include the production of yarn from
SSI spinning sector as well. The
contribution from the SSI sector has been about 5% in the total spun yarn
production. A statement showing
the production of spun yarn (including SSI units) during the last eight years
along with anticipated figures
for the current year is as mentioned in Table 3.3. Table 3.3
The pattern of production of cotton yarn during the last eight
years along with anticipated figures for the current year is as mentioned in
Table 3.4 Table 3.4
SICKNESS
/ CLOSURE OF TEXTILE MILLS As on 30-12-2000(P), there were 1842 mills, consisting of 1561
spinning mills and 281 composite
mills. Out of this, 382 Cotton/Man-made fibre
textile mills (265 Spinning and 117 Composite) with an installed capacity of 8. 91 mn. spindles, 45,436 rotors and 66,800 looms were
reported to be closed as on 30.12.2000 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
Table 3.5. Table 3.5
MEASURES TAKEN BY THE
GOVERNMENT TO TACKLE THE PROBLEM OF SICKNESS i) Setting
up 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. ii) Setting
up of Textile Workers’ Rehabilitation Fund Scheme (TWRFS) to protect the
interests of the workers of the closed mills. iii) Financial
institutions and Banks are also required to closely monitor the incidence of
growing sickness. iv) The
Expert Committee on Textile Policy constituted in 1998 has submitted its
report. The report has addressed problem of sickness in
the textile sector and has made some recommendations which are under
examination. BOARD FOR INDUSTRIAL AND FINANCIAL
RECONSTRUCTION (BIFR) As per the information obtained from the Board for Industrial and
Financial Reconstruction, there were 445 cases of textile mills registered
with BIFR as on 30.4.2000.
Number of mills State-wise registered with BIFR is given in Table 3.6. Table 3.6
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. 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) It
has obtained the requisite permission for closure from the appropriate State
Government under Section 25(0) of the Industrial Disputes Act., 1947, or
taken over by Official Liquidator appointed by the High Court, and (III) The
unit was 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 is 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 31.12.2000, 31 units in
Gujarat, 4 units in Tamil Nadu, 1 unit in Delhi, 3 units in Maharashtra and 2
unit in Madhya Pradesh making a total of 41, were found eligible under the
scheme. A total of 65197 workers of 41 mills have been disbursed relief of an
amount of Rs.143.68 crore upto 30.12.2000. During the current financial year, i.e. 2000-2001 upto
31.12.2000, Government released Rs.18.00 crore of which an amount of Rs.
1799/- lakh covering 5736
workers has already been disbursed. TECHNOLOGY UPGRADATION
FUND SCHEME (TUFS) Government of India, Ministry of Textiles has 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. 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 investments specified 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 (Weaving
knitting, processing
& garmenting manufacturing) For
Jute Industry : IFCI vi) The
SIDBI has co-opted 138 Financial Institutions comprising of 81 commercial banks 9 co-operative
Banks, Exim Bank, NCDC and 46 State Financial corporations/ State Industrial
Development Corporations/ Twin Function Industrial Development Corporation
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 83 financial institutions
comprising of 4 AIFI’s, Exim Bank, 30 Scheduled Commercial banks and 46
SFCs/SIDC’s/Twin Function IDC’s and / Co-operative bank. 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 Table 3.7. PRODUCTION OF CLOTH &
EMPLOYMENT GENERATION 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 1999-2000 was 1714 mn. sq. mtr. as compared to the production of
1990 mn. sq. mtr. in 1993-94. 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 as given in Table 3.8.
The employment generation in cotton/man-made fibre textile industry as on
30/10/2000(P) was 9.96 lakh.
Note: (i) PLIs
includes Bank of Baroda, Punjab National Bank, Canara Bank, State Bank of
Indore, State Bank of India, State Bank of Travancore, Indian Overseas Bank, Karnataka
Bank Ltd., Andhra Bank, Rajasthan Financial Corporation , Punjab Financial
Corporation, Gujarat Industrial Investment Corporation, Punjab State
Industrial Development Corporation Ltd., Andhra Pradesh State Financial
Corporation, Rajasthan Industrial Investment Corporation Ltd., Economic
Development Corporation of Goa, Tamilnadu Mercantile Bank Ltd., Haryana State
Industrial Development Corpn. Ltd., Oriental Bank of Commercial, Karur Vysya
Bank Ltd., Union Bank of India, The Surat Textile Traders Co-op Bank Ltd.,
The Surat Peoples Co-op Bank Ltd., Bharat Overseas Bank, Catholic Syrian
Bank, West Bengal Financial Corporation, Karnataka State Financial
Corporation, Gujarat State Finance Corporation, Maharashtra State Financial
Corporation, Tamilnadu Industrial Investment Corporation Ltd., Federal Bank,
The South Indian Bank, Bank of Madura Ltd., Corporation Bank, Vijaya Bank,
Syndicate Bank, Global Trust Bank Ltd., The Sangli Bank Ltd., Haryana
Financial Corporation. (ii)
The Bank
of Tokyo-Mitsubishi Ltd., BHF-Bank, Societe Generale, SBI Commercial and
Internatiional Bank, Sanwa Bank, BNB Paribas, Indian Bank, The Lakshmi Vilas
Bank Ltd., Development Credit Bank Ltd., Scotia Bank, The Lakshmi Vilas Bank
have submitted ‘NIL’ information. Table 3.8
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