MSP of Cotton raised by 39% to Rs. 2500 per quantum
TUFS TO CONTINUE IN 11TH FIVE YEAR PLAN
PALLADAM HI-TECH WEAVING PARK STARTS UNDER SITP SCHEME
NIFT OPENS FOUR MORE CENTRES AT KANNUR, PATNA, SHILLONG AND BHOPAL
Year-End Review
Ministry of Textiles
The Indian Textiles Industry has
an overwhelming presence in the economic life of the country. Apart from providing one of the basic necessities
of life, the textiles industry also plays a pivotal role through its contribution
to industrial output, employment generation, and the export earnings of the country.
Currently, it contributes about 14 percent to industrial production, 4
percent to the GDP, and 13.50
percent to the country’s export earnings. It
provides direct employment to over 35 million people, which includes a substantial
number of SC/ST, and women. The Textiles
sector is the second largest provider of employment after agriculture. Thus, the
growth and all round development of this industry has a direct bearing on the
improvement of the economy of the nation.
Due to policy measures initiated by
the Government in the recent past, the Indian textiles industry is in a stronger
position than it was in the last six decades. The industry which was growing at 3-4 percent
during the last six decades has now accelerated to an annual growth rate of 16
percent in value terms and will reach a level of US $ 115 billion (exports US
$ 55 billion; domestic market US $ 60 billion) by 2012, from US$ 52 billion in
2007-08. The catalyst for this exponential
growth is a buoyant domestic economy, substantial increase in cotton production,
a conductive policy environment provided by the Government, and the end of the
Multi Fibre Arrangement (MFA), on December
31, 2004. The
rationalization of fiscal duties undertaken during the last four years, has also
provided a level playing field in all segments of the industry, resulting in the
holistic growth of the industry. A strong foundation for industry has been laid
on which world class manufacturing units can realize their full potential and
make a mark in the international economy.
The growth manifests through a consistent
increase in production of fabric, per capita availability of cloth and investments.
During 2007-08, the total production of fabric was 57 billion sq mtrs, compared
to 53 billion sq mtrs in 2006-07 and 50 billion sq mtrs in 2005-06. During 2006-07,
the per capita availability of cloth was 39.60 sq mtrs, compared to 36.10 sq mtrs
in 2005-06 and 33.10 sq mtrs in 2004-05. The textiles sector has witnessed a spurt in
investment during the last four years, increasing from Rs. 7,941 crore in 2004-05
to Rs. 16,194 crore in 2005-06, to Rs. 61,063 crore in 2006-07, and to Rs. 19,308
crore in 2007-08. The investment between 2004-08 was Rs. 1,04,506 crore and it is expected that
investments will touch Rs. 1,50,600 crore by 2012. This enhanced investment will
generate 17.37 million jobs (comprising 12.02 million direct and 5.35 million
indirect jobs) by 2012.
The main engine
of investment has been the Technology Upgradation Fund Scheme (TUFS). The increased
investment will help to upgrade technology, strengthen infrastructural facilities
at potential textiles growth areas, increase the installation of additional spindles
and looms. Besides, it will provide a fillip to the garmenting,
technical textiles and processing segments of textiles industry, which
have a great potential for value addition and employment generation.
During the
last four years, the Government has successfully fulfilled the promises made in
the National Common Minimum Programme (NCMP):
• Investment has increased significantly
in the textiles sector, and is expected to touch Rs.1,50,600 crore by 2012.
This enhanced investment will generate 17.37
million jobs (comprising 12.02 million direct and 5.35 million indirect
jobs) by 2012.
• Investment in the textiles and clothing
sector in the past three years increased from Rs. 7,941 crore in 2004-05 to Rs.
16,194 crore in 2005-06, and Rs. 61,063 crore in 2006-07, and Rs. 19,308 crore in 2007-08 amounting to a total investment of Rs. 1,04,506
crore.
• The textiles industry which was growing
at 3-4 percent during the last six decades has now accelerated to an annual growth
rate of 16 percent in value terms and will reach a level of US $ 115 billion (exports
US $ 55 billion; domestic market US $ 60 billion) by 2012, from US$ 52 billion in 2007-08.
• The Indian textiles industry, particularly
the spinning sector, has been in a rapid modernization and expansion mode in recent
years, adding 2 to 2.5 mn spindles every year.
• The total fabric production in 2006-07 is estimated at 53 billion sq mtrs,compared
to 50 billion sq mtrs in 2005-06 and 45 billion sq mtrs in
2004-05.
• The per capita availability of cloth
in 2006-07 was 40.2 sq mtrs, compared to
36.10 sq mtrs in 2005-06 and 33.50 sq mtrs in 2004-05.
• Textiles exports grew from US$ 14 billion
in 2004-05 to US$ 17.52 billion in 2005-06 at an average of nearly 25%. These
were US$19.14 billion in 2006-07, registering an increase of 9.3%.
• Textiles exports
during 2007-08 were US$21.46 billion, registering a growth of 12.10%.Textiles exports in 2008-09 will be 20%
more than what were achieved in
2007-08.
• In order to introduce state- of-the-
art technology in the industry,the Technology Upgradation Fund Scheme (TUFS) has
been continued in the XIth Five Year Plan. During its initial years, the progress
of the scheme was moderate, and it gained omentum from 2004-05 onwards. From its
inception till March 31, 2008, 18,925 applications have been received, involving
a project cost of Rs. 1,23,664 crore, and 18,773 applications have been sanctioned
at an estimated project cost of Rs. 1,22,087 crore. During 2007-08, Rs. 43,700
crore was disbursed, registering a growth of 16.46% on year to year basis.
• The Scheme for Integrated Textiles Parks (SITP)
was launched in July 2005 to strengthen infrastructural facilities in potential
growth areas. So far, 40 Integrated Textiles
Parks had been sanctioned. These Parks
will attract an investment of Rs. 21,
502 crore; and when operationalised, will create employment (direct and indirect)
for some 9.08 lakh workers, and annually produce goods worth Rs. 38, 115 crore.
The Scheme will continue till 2012.
ü The Palladam Hi-Tech Weaving Park,
set-up under the SITP Scheme, was inaugurated by Shri. P. Chidambaram, Minister
of Finance in the presence of Shri. Shankersinh Vaghela, Minister of Textiles
on April 19, 2008. The Park will provide employment to approx. 5,000 people.
ü The Brandix India Apparel City Park, Vishakapatnam, Andhra Pradesh and
Pochampally Handloom Park, Pochampally, Andhra Pradesh have
become operational. These parks will provide employment to approx. 1.50 lakh people and annually produce goods worth Rs.
7, 035 crore.
• Due to focused support to cotton growers,
cotton production reached 244 lakh bales (170 kg. each) in the cotton season (October-September)
of 2005-06, 270 lakh bales in the cotton season of 2006-07, and was 315 lakh bales,
a record, in the cotton season of 2007-08. The productivity jumped from 399 Kg./hectare in the cotton season of 2003-04
to 560 kg./hectare in the cotton season of 2007-08.
• 58 lakh bales of cotton were exported
in 2006-07 against 47 lakh bales in2005-06, and 0.84 lakh bales in 2002-03. In 2007-08, exports were 100 lakh
bales.
• Consequently, cotton imports have declined
from around 17 lakh bales in 2002-03 to 5 lakh bales in 2006-07. Imports are expected to be around 6.50 lakh
bales in 2007-08. Since 2005-06, the country has become a net exporter of cotton.
• Due to the persistent demand of the
Industry the Government abolished import duty of 14.7%, and drawback benefits
of 1% on raw cotton w.e.f. July 8, 2008. This measure has helped to stabilise
prices.
• The first "TEX-SUMMIT 2007" was organised (August
31 - September 1, 2007) in association with the industry
to deliberate on problems facing it. Dr. Manmohan Singh, Prime Minister of India,
in his valedictory address to the Summit announced the following initiatives:
ü Technology Mission on Technical Textiles
ü Investment Regions for the Textiles Sector
ü Finalisation of a Scheme of Neighbourhood
Apparel and Textiles Training Institutes for Job Assurance (NATIJA) to train 4 million workers.
ü The Revitalisation of Handlooms Cooperatives
on the pattern of agricultural cooperatives.
•
Strategy to expand markets, diversify and
realise greater value for
textiles products.
• A New scheme titled "Development
and Growth of Technical Textiles" will be implemented during the XIth Five
Year Plan. The Scheme plans to set up 4 Centres of Excellence (COE) for technical textiles. These are
Meditech, Geotech, Agritech and Buildtech.
• The Modified Revival Scheme (MRS) for the National Textiles Corporation
(NTC), at an estimated cost of Rs. 5,267 crore, was approved by the Board for
Industrial & Financial Reconstruction (BIFR) on March
28, 2006. It was approved by the Government on December
5, 2006. This
scheme will be financed through interest free loans of Rs. 528 crore from the
Government of India, and Rs. 4,739 crore will accrue from the sale of land and
other assets.
• The Finlay Mill of NTC is being relocated
from Mumbai to Achalpur, District Amravati, Maharashtra.The President,
Smt. Pratibha Devisingh Patil laid the foundation stone of
this greenfield project at Achalpur on September
6, 2008 .
ü The green field project will provide
employment to 1,284 persons. The cost of modernization
is Rs. 236 crore and the first phase will operationalise by March 2009.
• The National Jute Policy was announced
on April 15, 2005. The Jute Technology Mission at an
estimated cost of Rs. 355 crore was launched in February 2007.
• Six Jute parks will be set up by 2012,
of these three sites have been shortlisted at West Bengal and one at Rajasthan.
• Government have placed a Jute Board Bill before Parliament to set-up
the Jute Board to bring about better co-ordination and efficiency in various organisations
in the Jute Sector.
• Government have decided to revive National
Jute Manufacturing Corporation (NJMC) by running three of its Jute Mills (Kinnison,
Khardah and RBHM Katihar).
• The National Institute of Fashion Technology
Act, 2006 came into force on April 11, 2007. This
Act provides statutory status to the Institute, and formally recognizes its leadership
in the fashion technology sector. The Act empowers NIFT to award degrees to its
students from 2007 onwards. The President of India is the visitor of the Institute.
ü A new centre was opened in Rae Bareli
in Uttar Pradesh on February 13, 2007, which was inaugurated by Smt. Sonia
Gandhi, Chairperson, United Progressive Alliance (UPA).
ü The Foundation Stone of NIFT centre
at Kannur, Kerala was laid by Shri. Shankersinh Vaghela, Minister of Textiles
on April 19, 2008.
ü New NIFT centres have opened at Patna, Shillong and Bhopal . The Shillong centre was inaugurated
on August 11, 2008.
Government has also opened a NIFT sponsored centre at Mauritius.
• Government will develop world-class
infrastructural and production facilities at handicrafts, handlooms, and decentralised
powerlooms clusters with a minimum of 5,000 looms (handlooms and powerlooms) through
adoption of a Comprehensive Cluster Development approach. Initially, the Government
proposes to take up the following mega clusters for development:
• Handlooms in Varanasi (Uttar Pradesh), and Sibsagar (Assam)
• Handicrafts in Narsapur (Andhra Pradesh)
and Moradabad (Uttar Pradesh)
• Powerlooms in Bhiwandi (Maharashtra) and Erode (Tamil Nadu)
• In 2007-08, an additional 251 clusters
with 300-500 handlooms, were taken up for their comprehensive development under
the Integrated Handlooms Development Scheme. Each cluster will be developed at
an estimated cost of Rs. 60 lakh.
• The National Handicrafts Design Gallery
at Rajiv Gandhi Handicrafts Bhawan was inaugurated by Shri. Shankersinh Vaghela,
Minister of Textiles on July 21, 2008. The 5,000 sq.ft. gallery will showcase
a wide range of hand crafted master creations of National award winning artisans
and Shilp gurus for public and business
community.
• The Handloom Mark was launched by Dr.
Manmohan Singh, Hon'ble Prime Minister of India on June 28, 2006,
to promote handlooms.
• The Health Insurance Scheme of Handloom
Weaver was launched on Nov 3, 2005. The Mahatma Gandhi Bunkar Bima Yojana
was launched on October 2, 2005. During XI Year Plan both the above
scheme has been amalgamated life into Scheme viz., Handloom Weavers Comprehensive
Welfare Scheme.
(i) Cotton
Cotton is one of the principal
crops of the country and is the major raw material for the domestic textiles industry.
It provides sustenance to millions of farmers and contributes significantly to
the country’s export earnings. The Indian textiles industry consumes
a diverse range of fibres and yarn, but is predominantly cotton based. The
ratio of the use of Cotton to Man-made fibres and filament yarns by the domestic
textiles industry is 56:44.
Presently, India is the second
largest producer of cotton (4.13 mn. metric tones), accounting for 16 per cent
of global production, with the largest cultivated area in the world (96 lakh hectares
in the cotton season of 2007-08 (October- September) ). The States of Punjab,
Haryana, Rajasthan, Gujarat, Maharashtra, Madhya Pradesh, Andhra Pradesh, Karnataka
and Tamil Nadu accounts for 99 per cent of cotton production in the country.
MAJOR INITIATIVES
Due to focused support provided by
the Government to farmers, cotton production was 315 lakh bales (170 kg. each), a record in the cotton season
of 2007-08. The productivity of cotton has jumped to 560 kg/hectare in the cotton
season of 2007-08, from 399 kg/hectare in the cotton season of 2003-04. Since
2005-06, the country has become a net exporter of cotton. In 2006-07, 58 lakh
bales of cotton were exported against 47 lakh bales in 2005-06, and 0.84 lakh
bales in 2002-03. In 2007-08, exports of raw cotton exceeded
the target of 65 lakh bales and were 85 lakh bales, mainly due to fall in acerage
in the USA and higher global demand. Consequently,
cotton imports have declined from around 17 lakh bales in 2002-03 to 5 lakh bales
in 2006-07. The Imports were around 6.5 lakh bales in 2007-08.
From October-end
2007 till July 2008, the cotton prices had been higher by around 20% to 40% compared
to last year. The opening cotton prices during the fiscal 2007-08 had been higher
by around 4% to 17% as compared to previous year. This was affecting the viability
of textiles mills, and, on the persistent demand of the Industry, the Government
abolished import duty of 14.7%, and drawback benefits on raw cotton w.e.f. July 8, 2008. The measure has helped to stabilize
prices.
A significant
increase in the cotton production has increased the availability of raw cotton
to the domestic textiles industry at competitive prices, providing it with a competitive
edge in the global market. The reasons for increase in the production include
increasing usage of Bt cotton and the implementation of the Technology Mission
on Cotton (TMC). The area under the Bt cultivation, which was around 5 lakh hectares
in the cotton season of 2003-04, has gone up to 66 lakh hectares in the cotton
season of 2007-08, and is expected to be 86 lakh hectares in the cotton season
of 2008-09. It is estimated that cotton production during the cotton season of
2008-09 will be around 322 lakh bales, up 2.17% over the previous season’s figure
of 315 lakh bales. The cotton exports are estimated at 75 lakh bales, and productivity
will be 591 kg/hectares, a record.
TECHNOLOGY MISSION ON COTTON (TMC)
TMC was launched in February 2000 to
improve the quality and productivity of cotton, reduce contamination and the cost
of production of cotton, and provide the much-needed competitive advantage to
the Indian textiles industry. Another objective was also to ensure attractive
returns to the farmers.
The TMC comprises four
Mini-missions:
1)
Mini-mission I - Strengthening of Research & Development of high yield
and hybrid verities.
2)
Mini-mission II – Transfer of Technology to farmers.
3)
Mini-mission III – Improvement of Marketing Infrastructure.
4)
Mini-mission IV – Modernisation/ Upgradation of Ginning and Pressing Factories.
The Ministry
of Agriculture was the nodal Ministry to implement mini-missions I and II, and the Ministry of
Textiles for mini-missions III and IV. TMC was to remain operational
till March 31, 2007, but mini-missions III and IV have now been extended till
March
31, 2009.
Progress till September 2008:
Mini-Mission- III:
ü
Development
of 250 market yards (including new market yards and also improvement of existing
ones) has been sanctioned.
ü
142 market
yards had been completed at an estimated cost of Rs. 496 crore. The share of the
Government of India is Rs. 255 crore.
Mini-Mission- IV:
ü
Modernization
of 992 ginning and pressing factories out of 1,000 factories has been sanctioned.
748 factories had been
modernized at a cost of Rs.1,444 crore. The
share of the Government of India is Rs. 227 crore.
Contract Farming
The Cotton
Corporation of India Ltd. (CCI), a Public Sector Undertaking under the Ministry
of Textiles, has covered about 40,000
hectares under the Cotton Contract Farming Scheme during the cotton season of 2007-08,
as compared to 33,200 hectares in the cotton season of 2006-07, in association with leading textiles
mills/ State organizations. The Scheme aims to enhance productivity of cotton
through provision of inputs, training and extension services to farmers. CCI monitors
the crop and purchases the entire produce from farmers, at prevailing market prices.
The Scheme covers all the major cotton growing States.
Minimum Support Price Operations
The Government
is operating the Minimum Support Price (MSP) Scheme through the agency of CCI
to ensure a minimum return to the farmer even in the depressed market conditions.
The support price are fixed by the Government for two basic varieties of cotton
of fair average quality, recommended by the Commission for Agriculture Costs and
Price (CACP). While one is the medium long staple length group of 25 mm-27 mm of the variety F414/H-777/J-34, the
other is the long staple group of 27.5 mm-32mm which is of the variety H-4. Based
on the support price of these two basic varieties and taking into account the
normal price differential and other relevant factors, the MSP for other varieties
of seed cotton of fair average quality are fixed by the Textiles Commissioner.
In the Cotton season of 2007-08, CCI under commercial operations, purchased 7.65
lakh bales, valued at Rs. 9.21 crore, compared to 2.71 lakh bales valued at Rs.
286 crore in the cotton season of 2007-08. CCI purchased 12 lakh quintal
of Kapas (cotton with seed) equivalent 2.25 lakh bales valuing Rs. 249 crore in
Andhra Pradesh & Orissa, under MSP operations during 2007-08.
The MSP of medium staple cotton of length group 24.5 mm to 25.5 mm, has been raised by 39% to Rs. 2,500
per quintal in the cotton season of 2008-09. The MSP last year was Rs. 1,750 to
1,800 per quintal. The MSP for long staple variety of length group 29.5 mm to 30.5 mm has been raised to Rs. 3,000 per quintal
in the cotton season of 2008-09 from Rs. 2,250 per quintal in the cotton season
of 2007-08.
Amelioration of condition of Cotton
Farmer
The measures adopted by the UPA Government in recent past have helped to
ameliorate the condition of cotton farmers in the country, particularly in Maharashtra. The main reasons have been:
(i) Hike in MSP for H-4 grade long staple
cotton in Maharashtra to Rs. 2,030 in the cotton season of 2007-08 from
Rs. 1,990 in the cotton season 2006-07, and Rs.
3,000 per quintal in the cotton season of 2008-09.
(ii) Increase in the yield of Cotton in Maharashtra from 207 kg. per hectare in the cotton season
of 2005-06 to 274 kg. per hectare in the cotton season
2006-07 and 330 kg. per hectare in the cotton season
2007-08.
(iii) The cost of cultivation has come down due
to increased sowing of Bt cotton seeds.
The Government
is committed to protecting the interests of workers in closed private mills through
the Textiles Workers Rehabilitation Fund Scheme (TWRFS). The scheme provides monetary
relief for three years on a tapering basis to eligible workers to the extent of:
ü
75% of the
wage equivalent in the first year;
ü
50% of the
wage equivalent in the second year; and,
ü
25% of the
wage equivalent in the third year.
·
Till 2008-09
(up to August 2008), 95,241 workers had been covered under the scheme, and Rs.
239 crore was disbursed to them.
·
The Government
will spare no effort till each eligible worker in the closed mills gets his due.
·
During 2008-09,
Government has released Rs. 38 crore under TWRFS.
TWRF Scheme progress Report from June 6, 1985, to August 31, 2008
| S. No | State | No. of workers benefited (as on 31.08.2008) | Disbursed amount (Rs. in crore) |
| No. of mills | Fully paid workers |
| 1 |
2 |
3 |
4 |
5 |
| 1. | Gujarat | 43 | 61,138 | 154.21 |
| 2. | Maharashtra | 3 | 2,995 | 6.50 |
| 3. | Madhya Pradesh | 4 | 17,718 | 47.41 |
| 4. | Tamil Nadu | 5 | 4,664 | 7.01 |
| 5. | Karnataka | 4 | 2,242 | 9.07 |
| 6. | West Bengal | 2 | 5,228 | 12.00 |
| 7. | Delhi | 1 | 1,258 | 2.09 |
| Total | 61 | 95,241 | 238.29 |
The performance of TWRFS during last
the 5 years is detailed below:-
(Rs. in lakh)
| Sr. No. | Year | Amount released | No. of workers covered | The relief paid | % of the performance |
| 1 | 2003-04 | 113.5 | 343 | 111 | 98 |
| 2 | 2004-05 | 800 | 3,298 | 800 | 99.98 |
| 3 | 2005-06 | 800 | 3,224 | 800 | 99.99 |
| 4 | 2006-07 | 1,425 | 3,333 | 1,425 | 100 |
| 5 | 2007-08 | 3,984 | 12,002 | 3,984 | 100 |
| 6 | 2008-09 | 3,800 | 2,458* | 1,000* | |
| Total | 10,922.50 | 24,658 | 8,120 | 99.96 |
* Till September 15, 2008.
·
During the last four years the performance of TWRFS
has shown a quantum jump.
·
The number of beneficiaries had increased by 260% in
2007-08, compared to 2006-07.
·
Shri Shankersinh Vaghela, Minister of Textiles presided
over TWRFS relief distribution programme for the workers of M/s Binny Mills, at
Bengaluru, on September 12, 2008, and presented relief cheques of Rs. 76.55 lakh to
200 workers, of 21,200 eligible workers for assistance. The total assistance to be paid is Rs. 9 crores.
·
Shri Shankersinh Vaghela, Minister of Textiles presided
over TWRFS relief distribution programme held at Kannur, Kerala on Sept 13, 2008,
and presented relief cheques of Rs. 2.38 crore to 417 workers of M/s Thiruvepathy
Mills, Kannur.
·
Shri Shankersinh Vaghela, Minister of Textiles presided
over TWRFS relief distribution programme held at Mysore, Karnataka on September
13, 2008, and distributed relief cheques of Rs. 1.43 crore to 389 workers of M/s
K.R. Mills Mysore, M/s Dunford Fabrics Limited and M/s Sujata Mills, Nanjangud,
Karnataka.
·
During 2008-09 (Upto September 15, 2008), 2,458 workers have been provided
relief under the Scheme and Rs. 10.15 crore has been disbursed. During the rest
of year. Rs. 28 crore will be disbursed.
NSK/SL
(Release ID :46126)