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Textile Industry in India covers alarge gamut of activities rangingfrom production of its own raw

material namely, cotton, jute, silk and woolto providing to the consumers high valueadded products such as fabrics andgarments. Not only the natural fibresnamed above, the industry also uses largevarieties of synthetic and man made fibressuch as filament and spun yarns frompolyester, viscose, nylon and acrylic. Itplays a significant role in Indian economyfor its contribution to the Gross DomesticProduct, employment generation and

earning of foreign exchange. An estimated35 million people are directly employed inthe textile industry, which contributes to4% of GDP and 25% to total exportearnings. The production of textilesinvolves many processes, ginning, reeling,spinning, weaving, dyeing, processing,finishing and garment manufacturing.Because of these great diversity ofactivities involved, the grades of the skillsneeded by the industry also varysignificantly. Thus, totally unskilled to highlytechnically skilled people, cutting acrosscaste, creed, religion and gender find

CHAPTER I

HIGHLIGHTS

Shilp Guru Awards Ceremony

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MINISTRY OF TEXTILE

employment in the industry. Even thoughmanufacturing the base is somewhatoutdated, the textile industry has shownremarkable resilience and has grownconsiderably in terms of installedspindleage, yarn production and output offabrics and garments.

The spindleage capacity of the organisedsector has increased from about 36.67million in 1998-99 to 38.75 million by 2002-2003. A noticeable feature in this growthprocess has been the installation of largenumber of open-end rotors in 1990s andthe tendency to set up 100% ExportOriented Units in the field of spinning. Theproduction of spun yarn is anticipated totouch the figure of 3,088 mn. kgs duringcurrent financial year 2002-2003,registering an annual growth of about 1%during last five years. It is worth noting thatthe production of 100% non-cotton yarnhas shown an upward trend in recentyears and it is anticipated to touch thefigure of 307 mn. kg during 2002-2003,registering an annual growth of 11.64%during the last five years. The totalproduction of cloth by all sectors i.e. mill,powerloom, handloom and khadi, wool andsilk has also shown an upward trend inrecent years. The total production of clothis anticipated to touch the figure of 42,314mn. sq. mtrs during 2002-2003 showing anannual growth of 2.48% during last fiveyears. The cloth production fromdecentralised powerloom sector hasshown significantly higher annual growthrate of 4.8% during last five years.

The per capita domestic availability of clothin the country has increased to 31.97 sq.mtrs in 2001-2002 from 30.92 mtrs. in

1997-98, despite growth in population andsignificant increase in export.

IMPLEMENTATION OF NATIONALTEXTILE POLICY 2000

To prepare the textile Industry to meet thechallenges of integration with the worldtextile market, the National Textile Policy2000, was announced on 2.11.2000.Aimed at creating new opportunities forgrowth and access to the global marketseveral initiatives for modernization andinvestment for growth have been taken tocreate the conditions necessary toachieve the objective of the policy viz.developing a strong and vibrant textileindustry capable of producing quality clothat an acceptable price, contributingincreasingly to the provision of sustainableemployment and economic growth of thecountry and competing with confidence foran increased share of global market. Asfollow-up measures for implementation ofNTxP 2000, following initiatives have beentaken:-

(i) Textile Package:

Shri Yashwant Sinha, Union FinanceMinister in his Budget Speech of 2002-2003 announced the following TextilePackage for the faster development ofTextile Industry and to prepare list to meetthe challenges ahead after the phase outof the Multi Fibre Agreement by 2004: -

● Hank yarn has been brought withinthe net of excise duty at 8%, but atthe same time, provision forappropriate subsidy on the price ofhank yarn purchased by handloomweavers has been made.

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● In order to enable the weavers ofgrey fabric to avail of CENVAT creditscheme they have been allowed topay excise duty on an optional basis.Similar option has been extended tothe knitting sector.

● The rate of excise duty on fabrics,made ups and garments has beenfixed at 12% till 28.2.2005.

● Excise duty exemption in handprocessing of textile fabrics hasbeen confined to 3 processes only,namely scouring, hydro extractionand calendering, and in case of manmade fabric 7 specified processes.

● Excise duty exemption on handloomfabrics has been continued, andexcise duty exempted on handloomgarments subject to certification byHandloom Export PromotionCouncil.

● To enable the textile industry tomodernize itself and acquire newtechnology, excise duty on automaticshuttleless looms has beenexempted. Customs duty onspecified processing machinery andspecified silk reeling, weaving andtwisting machinery has beenreduced from 25% to 10%.

● The Specified jute machinery hasalso been exempted from exciseduty.

(ii) Constitution of an InterMinisterial Task Force :

An Inter-Ministerial Task Force, under thechairmanship of Secretary, Textiles hasbeen constituted in May 2002 to study the

Interim Report furnished by the SteeringGroup on Investment and Growth in TextileIndustry, to review the existing labour laws,assess the credit requirements for themodernization/ revival of Textile Industryand the availability of Institutional creditand to suggest measures for assuringadequate flow of funds to the TextileIndustry.

(iii) Apparel Parks for Exports:

The Government has launched a newscheme viz. “Apparel Parks for Exports” InMarch 2002 for imparting focused thrustfor setting up of apparel manufacturingunits of international standards at potentialgrowth centres. Till date, Government hassanctioned nine apparel park projects fordifferent States.

(iv) Textile Centre InfrastructureDevelopment Scheme (TCIDS):

The Government also launched a newscheme in March 2002 titled “TextileCentre Infrastructure DevelopmentScheme (TCIDS)” for modernisinginfrastructure facilities at major textilecentres of the country. With a view tobringing in urgency in implementation ofthe Scheme, the Government hasrecently(in December 2002) announcedmodifications in the scope and fundingpattern of the Scheme. Two TCIDSprojects for upgrading infrastructurefacilities at Sircilla, Distt. Karimnagar(Andhra Pradesh) and Panipat (Haryana)have since been sanctioned.

(v) Pruning of Textile Items from theList of Essential Commodities:

In keeping with the liberalisation of

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economy, a number of textile items listedamong essential commodities have beendeleted. Out of 11 items, only 5 items nowfigure in the list of essential commoditiesnamely, (i) Cotton and Woollen Textiles; (ii)Cotton either ginned or unginned andcotton seeds; (iii) Yarn made wholly fromcotton; (iv) Raw Jute; and (v) Jute Textiles.

PRIME MINISTER’S IMPORTANTINITIATIVES ON INDEPENDENCE DAY2002

Under this initiative, Ministry of Textiles willearmark Rs. 100 crore for a one-timespecial rebate on handloom fabrics tokick-start the employment-intensiveindustry and revive its production cycle. Anadditional Rs. 125 crore will be spent forskill upgradation of one lakh handloomweavers. The Ministry has also started aspecial contributory insurance scheme forone million weavers and artisans, whichwill combine the Jan Shree Bima Yojanawith Group Insurance.

TECHNOLOGY UPGRADATION FUNDSCHEME (TUFS)

One of the important thrust areas of theNational Textile Policy 2000 isimplementation of a TechnologyUpgradation Fund Scheme (TUFS).Launched by the Ministry on 1.4.99, thescheme aims to provide impetus to themodernization and technology upgradationof textile and jute industry. A 22 memberInter-Ministerial Steering Committeemonitors and reviews the scheme on aregular basis. On the basis of the feedback received from the Technical Advisorycum Monitoring Committee and industryassociations, necessary modification are

made in the scheme to improve itsaccessibility. To enable a greater numberof SSI units to avail of the benefits underTUFS the option to take an upfront 12%credit link capital subsidy has also beenprovided. The regional office of TextileCommissioner holds Facilitation Camps sothat more industrial units, includingpowerlooms, can make use of thescheme. Till November 2002, a total of1970 applications were received, of which1734 applications were sanctioned. Out ofRs. 5786.63 crore of loan sanctioned. Rs.4106.99 crore has been disbursed to 1395cases.

TECHNOLOGY MISSION ON COTTON

Considering the importance of the cottoncrop to the national economy, theGovernment of India has launched aTechnology Mission on Cotton (TMC) fromFebruary 2000 to address the issues oflow productivity and contamination. TheMission consists of four Mini Missions,which are being jointly implemented by theMinistry of Agriculture and Ministry of

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Textiles with the following objectives:Mini Mission I : Cotton research and

Technology generation.

Mini Mission II : Transfer of Technologyand Development.

Mini Mission III : Improvement ofMarketingInfrastructure.

Mini Mission IV : Modernization/Upgradation of Ginningand Processingfactories.

Mini Missions I & II are being implementedby the Indian Council of AgriculturalResearch (ICAR) and Ministry ofAgriculture respectively, while Ministry ofTextiles is the Nodal agency forimplementation of Mini Missions III & IV.Upto December 2002, under Mini Mission-III, 102 project proposals have beensanctioned. The total estimated cost isRs. 180 crore out of which Government ofIndia’s share would be Rs. 89 crore. UnderMini Mission-IV, modernization of 221ginning and pressing factories have beensanctioned at an estimated cost of Rs. 271crore out of which Government of Indiashare would be Rs. 47 crore.

SERICULTURE

Last two years of the IX-Plan witnessed abreakthrough in R & D by Central SilkBoard in:

● Tropicalizing the inherentlytemperate bivoltine silkworms.

● Developing host-plans withsignificantly high leaf yields formulberry silkworms

● Perfecting a package of practices forraising productivity at each stage ofcocoon production, including pestmanagement, disease control,development of more efficientrearing and cocooning equipment,eco-friendly methods of rearing, andefficient recycling of silkworm bedrefuse.

● Developing and popularizing reelingand reeling-cum-twisting machinesand spinning wheels for reeled andspun silks of all sub-sectors withbetter ergonomics, efficiencies andproductivities.

● Introduction of New Package forHigh Quality Silk

o This development of a successfulsericulture package for gradeablequality of bivoltine mulberry silk hasadded to the prospects of theindustry by carrying with it thepromise of a significant rise inproduction as well as in the quality ofsilk. The high tensile strength ofbivoltine silk adds to its otheradvantages by making possible theuse of multi-end reeling machinesand modern fast powerlooms, thuspromising an increase in quality andproductivity along the entire value-chain.

o For development of bivoltinesericulture, the strategy for growthhas been put into the field. This isexpected to spur the yields to go upfrom the current level of about 750Kg of cocoons from a hectare ofmulberry plantation to over 1600 Kg

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by the end of X-Plan. Already,bivoltine silk production hasincreased from 370 tonne in 1999-2000 to 575 tonne in 2000-2001; theyield for 2001-2002 was 750 tonne(provisional).

Fall in Prices of Raw Silk

After the lifting of quantitative restrictionson 1.4.2001 the import of raw silk, 92%from China, increased significantly, froman average of 3500 tonne over the last 5years to 6897 tonne in 2001-2002, and isexpected to touch 9000 tonne in 2002-2003. Simultaneously, a consistent fall inthe prices of imported silk, had the effect ofdriving down the prices of domestic silk byalmost 33%. For the first time, a marketintervention measure was considered insericulture. The affected States and theCentral Govern-ment sanctioned ascheme for a short-term price incentivefor reeling cocoonsto ease the unduehardship beingfaced by farmersdue to the fall inprices. Meanwhile,associations ofreelers moved theA n t i d u m p i n gDirectorate set upin accordance with WTO guidelines andsought relief. The preliminary findingsprima facie established dumping andrecommended antidumping duty.

Despite such adverse market conditions,Central Silk Board achieved a silk

production of 17347 tonne in 2001-2002and anticipates 18700 tonne for 2002-03.

PROGRAMME FOR MODERNIZATIONOF THE WEAVING SECTOR

Pursuant to the Textile Packageannounced by the Finance Minister in theBudget, a programme for modernization ofthe decentralized powerloom sector by2004 has been drawn up. The maininstrument is the TUFS, which has beenmodified to allow the beneficiary the optionof taking 12% subsidy linked to credit.The Lead Implementation Agency is thePowerloom Service Centres (PSCs), whichare being modernized and are proposed tobe strengthened to carry out a facilitationrole. A cluster approach is being followed,and 16 major powerloom clusters havebeen identified to make a focused effort for

m o d e r n i z a t i o n .State Governmentcoordination hasbeen emphasized;SIDBI and thebanks have beendrawn into theprogramme, Officeof the TextileCommissioner isthe managingorganization, andhas beenrestructured to

enable a developmental approach. Fundsfor the 2.5 lakh loom modernizationprogramme are provided in the budget aspart of the provision for TUFS. Fundshave also been provided for modernizingthe PSCs and for Welfare schemes forGroup Insurance and Work-sheds.

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BABA SAHEB AMBEDKAR HASTSHILPVIKAS YOJANA

A new scheme Baba Saheb AmbedkarHastshilp Vikas Yojana(AHVY) has beenformulated which has essentially a peoplecentric approach and involves mobilizationof the artisan community in important craftclusters all over the country into Self HelpGroups and Thrift & Credit Societies.Symposia on Baba Saheb AmbedkarHastashilp Vikas Yojana for thecrystallization of critical issues andadoption of implementation module for theAHVY were organized at Jaipur, Bhopal,Lucknow and Kolkata. The symposiumwas anchored by DRDA, SIDBI, NABARD,Planning Commission, Prominent NGOsand experts in the field of Handicrafts.

DEEN DAYAL HATHKARGHAPROTSAHAN YOJANA

Government launched an integrated andcomprehensive scheme called the DeenDayal Hathkargha Protsahan Yojana on1.4.2000 to provide assistance for theentire gamut of handloom sector activities,like product development, infrastructureand institutional support, training toweavers, supply of equipment andmarketing support etc. for weavers withinor outside the cooperative fold, both at themicro as well as the macro level. Thescheme is intended to be in operation tillthe end of the 10th Five Year Plan. Theoutlay envisaged is Rs. 690 crore,involving Central share of Rs. 360.00 croreto be given to State Governments onsubmission of project proposals.

SPECIAL PACKAGE FOR JAMMU &KASHMIR

During the Prime Minister’s visit to theState of Jammu & Kashmir in May 2002 aSpecial Package of Assistance wasannounced for that State. The contributionof textiles and handicrafts sector to thatPackage would be upwards of Rs.70crore. Action Plans for implementation ofthe Package have been prepared and areunder implementation. Department of J&KAffairs in the Ministry of Home Affairs andPMO have been monitoring the progress ofimplementation regularly.

JUTE

On the recommendations of the StandingAdvisory Committee, an Inter-MinisterialCommittee was constituted for formulatinga road map for progressive dilution ofcompulsory packaging norms forfoodgrains and sugar under the JPM Act.The Government has accepted therecommendations of the Inter-MinisterialCommittee with some modifications and anotification was issued on 12th July, 2002providing for the percentage of dilution asunder: -

Jute year Cumulative % of DilutionSugar Foodgrains

July 1, 2002 to June 30, 2003 25 20

July 1, 2003 to June 30, 2004 50 40

The percentage of reservation will,therefore, be 75% & 50% for sugar for 1st& 2nd year respectively; and 80% & 60% forfoodgrains for 1st & 2nd year respectively.

A review shall be done at the end of the 2nd

year (i.e. year ending on 30 June, 2004).This decision was challenged in the HighCourt at Kolkata through various WritPetitions by Indian Jute Mills Association

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(IJMA) and others. The Hon’ble High Courthas dismissed these Writ Petitions.However, an appeal filed by IJMA beforethe Division Bench of Kolkata High Court isstill pending.

New Initiatives

Responding to the assistance sought byvarious organisations and administrativeauthorities consequent upon the need toreduce use of plastic bags National Centrefor Jute Diversification (NCJD) hasinitiated some measures. The Centre hasdeveloped various low-cost jute bags forthe consumers. Efforts have been taken toenhance the use of jute in the states whereuse of plastic bags has been banned.Under NCJD’s assistance, in the NorthEast region, a new jute based fabric hasbeen developed. This fabric, which isblended with Eri & Muga, is finding wideacceptance as a furnishing material fordiverse application.

HANDICRAFTS

India Exposition Mart

With a view to give a massive fillip to theexporters of handicrafts, carpets and Jute,India Exposition Mart is being set up atGreater NOIDA. The MART shall be apermanent contact point for foreign buyersand shall remain open throughout the yearfor a continuous buyer-seller interaction.This MART shall have 900 outlets with aResource Centre and latest InformationTechnology enabled facilities. The Mart isexpected to boost exports further. The martis likely to be completed by July, 2004

Artisan Credit Card (ACC) Scheme

To address the issue of timely andadequate availability of working capital toartisans, it is proposed to implement thisscheme in the current financial year. It isexpected that the scheme would benefitmore than 1 lakh artisans by enabling themto avail of assistance through formalfinancial institutions directly to meet theirworking capital needs. The scheme hasbeen approved by Indian BanksAssociation and is going to be launchedshortly.

Urban Haat

To provide direct marketing outlets to

craftpersons and weavers, a scheme toestablish as Urban Haat at Delhi known as“Dilli Haat” was conceived in 1992 andmade fully functional during 1994-95.Encouraged by the overwhelmingresponse to the project, Ministry of Textilesthrough Office of DC (Handicrafts) and DC(Handlooms) prepared an Urban HaatScheme to establish another 18 UrbanHaats in the country during the 9th FiveYear Plan. A provision for establishment of20 Urban Haats has been agreed to duringthe 10th Five Year Plan. Till date, UrbanHaats sanctioned in the States are atAhmedabad (Gujarat) Agra (U.P.), Tirupati(AP), Kolkota (WB), Uchana(Karnal)(Haryana), Jammu (J&K), GoharMahal (M.P.) Raipur (Chhattisgarh)Dehradun (Uttranchal) Guwahati (Assam)Kanpur (U.P.) Srinagar (J&K) Thiruvantha-puram (Kerala) Bhubaneswar (Orissa) &Lucknow (U.P.), Agartala (Tripura), Jaipur& Jodhpur (Rajasthan), Surat & Bhuj(Gujarat), Ranchi & Hazaribagh(Jharkhand). Patiala (Punjab) & Varanasi(U.P.) Urban Haats at Thirupathi, Uchana,Jammu and Bhubneswar have started

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functioning. The remaining Urban Haatsare at different stages of completion. OneUrban Haat ensures direct fortnightlymarket facilities to approximately 5,000craftpersons/weavers in one year.

WOOL

An India Australia Joint Business Group onNatural Fibres and Textiles has beenestablished in February, 2000 to provide aformal government framework within whichcommercial interests would workcooperatively to develop bilateral trade andmarket linkages in the areas of wool,cotton and other natural fibres and textiles.The 2nd meeting of the Joint BusinessGroup was held in Canberra, Australia on

10th July, 2002. The Indian delegation wasled by Shri Shashi Bhushan, Director,Ministry of Textiles, who also co-chairedthe meeting. In the meeting, it was agreedthat both countries would enhance bilateralcooperation in areas concerning educationand training, product development, marketaccess, research and development bytaking up the following initiatives: -

i) Absorptive Capacity Study on therequirement of trained personnel inthe Indian Woolen Industry;

ii) Curriculum Review of traininginstitutes in order to enhance thewool content to meet therequirements of the Indian Woolenindustry;

Second meeting of India-Australia Joint Business Group on Natural Fibres & Textiles atCanberra on 10 July 2002.

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iii) Collaboration between RMIT(Australia) and NIFT(India) in thearea of fashion, design andmarketing;

iv) R&D in the area of blending ofnatural fibre – cotton, wool, jute andpashmina/cashmere and silk; and

v) Study on the Demand & SupplyChain of raw wool from Australia.

TEXTILE EXPORTS

Textile exports during the period of April-November 2002 amounted to US$ 7859.9million as against US$ 7137.4 millionduring the same period in the previousyear, recording an increase of around 10%.Thus, textile exports have again startedrecording positive growth from the currentfiscal year.

Having regard to the anticipated demandin coming months coupled with the timelyinitiatives taken by the Ministry to resolveexporters’ problems, textile exports duringthe year 2002-03 are expected to be in therange of US$ 13 billion.

A number of measures were taken by theMinistry towards strengthening the textileindustry for meeting the growing globalcompetition and for achieving exporttargets, besides launching of newschemes. The cost of textile machineryhas also been lowered through fiscal dutymeasures. DEPB rates for certain textileproducts were rationalized. In order toreduce transaction cost and time ofexporters, EMD/BG amounts werereduced and date for utilizing quotes wereextended. Large quantities were openedfor most categories under FCFS/RGE

system of the Quota Policies with a view toproviding quotas to garment and textileexporters on a continuous clearancebasis. Apparel International Mart is comingup at Gurgaon with financial assistancefrom the Government; the mart wouldprovide world class facility to the apparelexporters to showcase their products andserve as a one-stop shop to the reputedinternational buyers.

The Garment and Knitwear Quota Policywas amended from time to time to alignsome of its provisions to the emergingsituation and to make them moretransparent and exporter friendly.Notifications have been issued regardingchanging the last dates of realisation ofexports from 31st August to 31st Decemberin sub-para 5(iii) and 7(iv) of the garment &knitwear export entitlement (quota) policies2002-2004 and allowing NQE on exportsmade to Russia against freely convertiblecurrency.

REHABILITATION SCHEME FOR NTCMILLS

Rehabilitation Schemes have beensanctioned for nine subsidiaries of NTCcovering 119 Mills. As on 31.12.2002, 31Mills have been closed and around 18,000employees had been given VRSamounting to Rs. 544 crore.

TEXTILES IN NORTH EASTERNREGION

Following adoption of Prime Minister’spackage for development of the region,special focus is being given toimplementation of textiles and textile based

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activities, like handicrafts, handlooms,sericulture and jute in the North EasternRegion (NER). The important follow upaction already taken in this regard includeraising the share of Central assistance(excluding for marketing) to 90 percent forall Centrally Sponsored plan schemes, aswell as strengthening the North EasternHandicrafts & Handlooms DevelopmentCorporation (NEHHDC), now under theadministrative control of the newly createdDepartment of North Eastern Region(DONER).

During 2001-02 a total plan outlay of Rs 42crore was provided for NER and anamount of Rs.42.06 crore was spent on

the development schemes beingimplemented in the NER. For the currentyear 2002-03 a total provision of Rs. 47crore has been made for the region, whichincludes Rs 22 crore for handlooms, Rs15 crore for Sericulture, Rs.9.50 crore forhandicrafts and Rs 0.50 lakh for jute sectorrespectively.

OFFFICIAL LANGUAGE IN THEMINISTRY

A number of steps are being taken for theImplementation of Official Language Policyand progressive use of Official LanguageHindi in the Ministry :

l Meetings of Official Language

Prize distribution by Hon’ble Minister of State (Textiles) during Celebration ofHindi Pakhwara 2002.

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Implementation Committee

Meeting of Official LanguageImplementation Committee in thisMinistry under the Chairmanship ofJoint Secretary (Admn.) is beingregularly organised in each quarter.Last Meeting was organised on30.12.2002.

l Meetings of Hindi Salahkar Samiti

Ministry is regularly organising itsMeeting of Hindi Salahkar Samiti.Eight such meetings have since beenorganised by this Ministry. Its Seventhmeeting was organised on 10thOctober 2002 in Kolkata and the Eightmeeting in Mumbai on 3rd February2003 under the Chairmanship ofHon’ble Minister of Textiles.

l Organising Hindi Pakhwada(Fortnight)

A Hindi fortnight, w.e.f. 16thSeptember 2002 to 30th September2002 was organised in the Ministry, inwhich competitions on OfficialLanguage were held on Typing,debate, poetry, etc. Officials and staffof the Ministry of Textiles participatedin these competitions withenthusiasm. Awards were given to thewinners by Hon’ble Minister of Statefor Textiles in order to giveencouragement to the officials andstaff of the Ministry of Textilesto increase the progressive useof Official Language in theirofficial work.