Crucial economic sector restructuring

PUBLISHED : Friday, 15 July, 1994, 12:00am
UPDATED : Friday, 15 July, 1994, 12:00am

TEXTILES is India's single largest industry, accounting for about 20 per cent of the aggregated industrial output and providing jobs for about 15 million people.

It is also a vital contributor to India's exports, accounting for more than a quarter in 1992-'93 or Rs165 billion (about HK$33 billion).

Currently, the textile mills in the country are undergoing major restructuring.

The mills in the organised sector are not able to meet competition from the powerlooms though spinning continues to be profitable.

A number of composite mills have been closed down. Increasingly, the mills are modernising their plants and machinery and devoting greater attention to exports.

A number of 100 per cent export-orientated units have commenced operations. This healthy development is likely to accelerate the country's textile exports in the years to come and the export of the textiles including clothing but excluding non-textile items has been tentatively projected at Rs225 billion for 1994-'95.

With improved availability of quality fabrics at competitive prices, the garments industry is also expected to log a healthy growth.

Out of the 1,082 textile mills in the country, 188 are in the public sector, 110 are in the corporate sector and the balance 764 in the private sector.

The Indian textile industry is extremely complex and varied with the hand-spun and hand-woven sectors at one end and sophisticated, capital intensive, high-speed operations of the mill sector at the other end.

In between falls the decentralised small-scale powerloom section, whose production reached 12,743 million in 1991-'92, with its value of exports amounting to Rs9.69 billion.

With a view to providing a policy favourable to an integrated and balanced development acceptable to all sectors, that is, organised mills, decentralised powerlooms and handlooms, the Indian Government unveiled its textile policy in June 1985.

This policy was tailored to ensure the production of clothes of acceptable quality at affordable prices to meet the clothing requirements of the growing population keeping in view the employment and export potential of the country.

It examined the industry in terms of the stages of production. However, a review committee set-up to study the textile policy under the chairmanship of Abid Hussain, a former commerce secretary, concluded that the policy did not address itself adequately to the institutional, financial and other aspects required to achieve the objects it had set for itself.

In the light of the recommendations of the committee, a new textile policy has been formulated. It is aimed at reinforcing infrastructural support to handlooms and powerlooms, augmenting raw materials supply and exports, a fair return to cotton farmers, acceleration and modernisation.