A struggling industry demands roll-back of taxes to revive itself. The textile cluster in Punjab is passing through a rough patch. The industry is grappling simultaneously with high taxes and the high minimum support price of cotton. The revision of entry tax on the raw material to 4 per cent last year has also increased the difficulties for the industry. The tax is around 2 per cent in neighbouring states. The spindles in Punjab consume about 5 million bales of cotton a year. The production in the state is about 2.5 million bales a year, so Punjab imports cotton from other states.
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The common man’s fabric for years, khadi, is in the process of a facelift. The hand-woven yarn is being marketed so that it can take on the other supposedly more trendy and contemporary fabrics in the space. In this connection, the Khadi and Village Industries Commission (KVIC) is sponsoring a event by the Gandhi Ashram, Sitapur, to ensure attractive returns and proper marketing to the artisans engaged in the Khadi and Village Industries sector.
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Hike in minimum support prices (MSP) for cotton by 38% to 48% has imposed a burden of Rs 2,500 crore to Rs 3,500 crore on the central government, said Shankarsinh Vaghela, union minister for textiles. He further said that recession would not force the government to retreat on the decision. Vaghela was speaking at a seminar organised by Cotton Corporation of India Ltd (CCI) in Rajkot on Sunday. Cotton production in the country, which was 179 lakh bales in 2003-04, is expected to reach a record level of 322 lakh bales in 2008-09. Keeping pace with the increase in cotton production in the country, Gujarat is expected to post two-fold increase in 2008-09 compared to its production in 2003-04 which was 50 lakh bales.
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Slowdown in the textile industry is not going to deter the companies in the segment from going ahead with their investment plans in Gujarat. The state is expected to attract investment to the tune of Rs10,000 crore in the sector during the forthcoming Vibrant Gujarat Global Investors' Summit 2009 (VGGIS). The proposed projects are having a potential to generate around 1 lakh employment opportunities in the state, out of which contribution of Surat alone will be around 70-75%. According to sources in the government, number of memorandum of understanding (MoUs) for textiles would be around 40.
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