Sucheta Dalal :The textile imbroglio: Who’s spinning a yarn?
Sucheta Dalal

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The textile imbroglio: Who’s spinning a yarn?  

February 17, 2010

Union textiles minister Dayanidhi Maran has denied that there is unemployment in the textile industry. However, the Apparel Export Promotion Council (AEPC), the official body for apparel exports and a nodal agency sponsored by the ministry, does not agree with Mr Maran’s statement.


AEPC chairman Premal Udani said that the textile industry is suffering from unemployment due to an 8% drop in exports in the textiles and clothing sector. “We are predicting that there have been about nearly 4 lakh jobs lost in the textile sector,” Mr Udani said.


Earlier, while speaking at a Confederation of Indian Industries (CII) conference in Mumbai, the textiles minister said,”Frankly, this (the statement that there is unemployment in the textile industry) is wrong. Companies are running short of labour.”


Mr Maran said that textile companies are now asking for talented labour, as workers are moving into villages due to the National Rural Employment Guarantee Act (NREGA) and firms are seeking NREGA funds.


However, the minister ruled out the possibility of using NREGA funds for the textile sector. Mr Maran said, “How can we have NREGA when most of the units run by the industry are in the outskirts of Mumbai, Pune, Delhi and Bengaluru?”


According to NREGA, there is a guarantee of 100 days of employment in a year to one member from each rural household. Since its inception in February 2006, at least 41.5 million households have benefited from the scheme.


AEPC chairman Mr Udani had also met Mr Maran and asked him to retain the export incentives given by the Union government to the textile industry. “The Union government needs to continue with the sops as recovery is still fragile. The incentives given last year must remain till the end of this year,” Mr Udani said.


However, at the CII conference, Mr Maran had also told the textile industry to concentrate on the domestic market and stop clamouring for further incentives. “There is speculation in the industry that profits have been shrinking. (But) India suffered recession only for nine months. Now most of the textile companies are posting profits but there is still scope for improvement. Currently, more than 50% of production is exported, but the industry also needs to focus on the domestic market,” the minister said.


There has been a steep drop in textile exports from India over the past year, on account of falling demand in the US and the EU, which have been the two major markets for Indian textiles products. — Aaron Rodrigues


-- Sucheta Dalal