Even though the textile sector appreciated the centre's efforts announcing the stimulus package, Punjab's big textile manufacturers said on Monday the government 'could have done more' to bail out the industry by way of offering more sops. "This move of centre will give some relief...by way of arresting the decline in textile segment...but we wanted something more from the government," Integrated Textile Group Vardhman Textile Limited chairman and managing director S P Oswal said. Listing out the industry's priorities for bringing it out of difficult times, Oswal said that the government had not considered their demand of restoring duty drawback to boost the textile exports. "We were thinking that the government will restore the old duty drawback rates on textile exports which were cut down by the centre from October 1 onwards," he said. The government had reduced the duty drawback rates by 20-35 per cent on various textile products, the move which was proving detrimental to the growth of industry.
Oswal, who is also a chairman of CII's National Textile Committee, was of the view that the package would not ensure that there would not be any decline in textile export.
"The textile exports will drop by 7-10 per cent during this uncertain situation," he said.
Punjab's total yarn and textile export stands at Rs 2,223.38 crore (Rs 22.23 billion) as on March 31, 2008.
Asserting that the decline in textile's sector growth would not be as much as it was initially thought of during remaining months of this fiscal, but the industry would continue to face losses this year, he said "Industry will not be having profits this year".
Dubbing the package announced by the centre as 'too little', another textile major Nahar Spinning Mills managing director Dinesh Oswal said, "The government has not announced anything new for the textile sector in this stimulus package".
The government has not touched the real issue of the textile sector which is high price of cotton -- a key raw material for spinning sector.
"With Cotton Corporation of India not disposing of the cotton in the market at realistic rate, the spinning sector is facing huge shortage of cotton in the market, completely paralysing the industry for want of input," he alleged, while adding, 'the industry was forced to cut down the production and even laying off people.'
He further said that CCI had lifted 27 lakh bales from the market and released just 50,000 bales in the market.
It is pertinent to mention here that because of the increase in cotton prices this year, on the back of high minimum support price, Punjab's spinning sector was compelled to cut down their cotton yarn production by 20-35 per cent and raw cotton intake by over 50 per cent in view of pressure on margins.