ANNUAL REPORT 2000-2001--HIGHLIGHTS

INTRODUCTION

From growing its own raw material - cotton, jute, silk and wool - to providing high value added products to the consumers - fabrics and garments, the textile industry covers a wide range of economic activities and has thus a significant role in the economy of the country. At present it contributes about 13-14% to industrial production and about 37% to the country's export earnings. After agriculture it is the largest employer. It provides employment to weaker sections such as SCs/STs, women and minorities in rural as well as urban areas. It comprises both the organised mill sector as well as decentralised sector including powerloom and handloom units. In addition to the natural fibres the industry also uses wide range of synthetic and man made fibres such as polyester, viscose, nylon, acrylic as well as filament yarn. The production of textiles involves many processes such as ginning, reeling, spinning, weaving, processing and garment manufacturing.

Despite an obsolescence of infrastructure, the textile industry has shown remarkable resilience to various vicissitudes and has grown considerably in terms of installed spindleage, yarn production and output of fabric and garments. The spindleage capacity has increased from about 28.60 million in 1993-94 to 37.70 million by the end of November 2000. A large number of open end rotors in the 1990s were installed and the trend of setting up of 100% export oriented units in the field of spinning has continued. The production of spun yarn is anticipated to touch the figure of 3227 million kgs during the current financial year showing an annual growth rate of 5.36% during the last 5 years. It is worth noting that the production of blended yarn and 100% non cotton yarn has shown upward trend in recent years. The production of blended yarn is anticipated to touch the figure of 639 million kgs during 2000-2001 registering an annual growth of 10.10% during the last 5 years. The production of 100% non cotton yarn is anticipated to touch the figure of 243 million kgs during 2000-2001 registering an annual growth of 4.39% during the last 5 years. The total production of cloth by all sectors i.e. mill, powerloom, handloom, khadi, wool and silk has also shown an up trend in recent years. The total production of cloth is anticipated to be 41324 million sq. mtrs. during 2000-2001 which works out to 5.27% annual growth in the last 5 years. The decentralised hosiery sector has shown a significantly higher annual growth rate of 5% during the last 5 years. The above growth in textile industry has led to an increase in per capita domestic availability of the cloth in the country despite repeated growth in population and significant growth in exports. The per capita availability has risen to 31.25 sq.mtrs. in 2000-2001 (provisional) from around 26.22 sq. mtrs. in 1993-94.

NATIONAL TEXTILE POLICY 2000
The last few years have seen tremendous changes in the textile scenario. The regime of liberalisation and free trade has initiated a process of integration of world textile market by world wide phasing out of quantitative restrictions on imports. The change has created new opportunities for growth as global market has now become available to the trade; at the same time it has led to new challenges for the domestic industry as import barriers will have to be considerably reduced, if not totally removed, in the very near future. There has, therefore, been a need for a new look at the Textile Policy which Government had announced in 1985. The National Textile Policy 2000 announced by the Government on 2.11.2000 is aimed at preparing the industry for successfully meeting the challenges of the barriers free era and taking advantage of the opportunities it holds. The Policy also aims at developing a strong and vibrant textile industry capable of producing quality cloth at an acceptable price, contributing increasingly to the provision of sustainable employment and economic growth of the country and competing with confidence for an increased share of global market.

Some of the important targets and main thrust areas of National Textile Policy 2000 are as follows :-

IMPORTANT TARGETS
Achieve the target of textile and apparel exports from thepresent levelof US $ 11 Billionto US $ 50Billionby2010 ofwhichtheshareofgarments will be US $ 25 Billion;
Implement the Technology Upgradation Fund Scheme covering all manufacturing segments of the industry;
Achieve increase in cotton productivity by atleast 50% and upgrade its quality to international standards, through effective implementation of the Technology Mission, on Cotton;
Launch the Technology Mission on Jute to increase productivity and diversify the use of thisenvironment-friendly fibre;
Encourage setting up of world class integrated textile complexes and processing units;
De-reserve the garment industry;
Strengthen & encourage the handloom industry to producevalue added items and assist the industry to forge joint ventures to secure global markets.

THRUST AREAS
Technological upgradation
Enhancement of Productivity
Quality Consciousness
Strengthening of the raw material base
Product Diversification
Increase in exports and innovative marketing strategies
Financing arrangements
Maximising employment opportunities
Integrated Human resource Development

TECHNOLOGY UPGRADATION FUND SCHEME
One of the important targets of the NTxP 2000 is a vigorous implementation of Textile Upgradation Fund Scheme (TUFS). Launched by the Ministry on 1.4.99, it aims to provide impetus to the modernisation of textile and jute industry.

Under the Scheme, an interest reimbursement of 5% is provided on the interest charged by financial institutions for the capital loaned to textile and jute units for modernisation or technology improvement. The IDBI, SIDBI and IFCI have been appointed as nodal lending agencies. They have coopted other financial institutions/ banks to provide a wider reach to the industry in the country. Loans under the scheme are extended by the nodal agencies/coopted institutions to the identified segments of the industry for the projects in conformity with the scheme and their own financial norms.

A 22 member Inter-Ministerial Steering Committee monitors and reviews the scheme on a regular basis. On the basis of feed back from the industry and other interests, necessary changes are made in the scheme so that industry can take full advantage of the scheme.

To make more and more industrial units avail the benefits under TUFS the scheme has been amended recently to relax certain conditions for applications. Also at the behest of the Ministry, regional offices of Textile Commissioner have been holding Facilitation Camps so that more industrial units including powerlooms can make use of the scheme.

Till January 2001, a total of 1004 applications were received, out of which 803 applications have been sanctioned for an amount of Rs. 4201 crore of loan. Rs. 2236 crore has been disbursed against 560 cases.

TECHNOLOGY MISSION ON COTTON DEVELOPMENT
The Technology Mission on Cotton was started in February 2000 with four mini-missions to strengthen the raw material base of a significant segment of the industry, and to improve the productivity & quality of cotton.
Mini Mission - I : On cotton research and technology generation.
Mini Mission - II : On transfer of technology and development.
The above two Mini Missions are being administered by Ministry of Agriculture.
Mini Mission III : Improvement of marketing infrastructure. As on 31.12.2000, project proposals for improvement of 20 market yards, activation of 10 market yards and setting up of 4 new market yards have been sanctioned, the total estimated cost being about Rs.42.36 crore of which the Central Government share would be Rs.23.13 crore.
Mini Mission IV :Modernisation and upgradation of ginning and pressing factories. One hundred proposals for modernisation of ginning and processing factories at an estimated cost of Rs.98.98 crore have been sanctioned, the Central Government share being Rs.19.38 crore.

INITIATIVES IN NORTH-EAST
National Textiles Policy 2000 has laid emphasis on development of North East and other backward regions of the country. In September 2000, a Conference of State Government Ministers of North Eastern States and Sikkim was held in Guwahati to focus attention on development of this region. Development Commissioner (Handlooms) has been declared the Nodal Officer for monitoring the progress of development schemes and programmes in handloom, handicrafts and sericulture sector in this region.

DEEN DAYAL HATHKARGHA PROTSAHAN YOJANA
Strengthening of the handloom industry, and redesigning and revamping of schemes and programmes, are important targets given in the NTxP 2000. With this objective in view Government have launched an integrated and comprehensive scheme called the Deen Dayal Hathkargha Protsahan Yojana to provide assistance for the entire gamut of handloom sector activities, like product development, infrastructure and institutional support, training to weavers, supply of equipment and marketing support etc. for weavers within or outside the cooperative fold, both at the micro as well as the macro level. The scheme is intended to be in operation till the end of the 10th Five Year Plan. The outlay envisaged is Rs.690 crore, involving Central share of Rs. 360.00 crores to be given to State Government on submission of project proposals.

DE-RESERVATION OF GARMENT SECTOR
One of the important targets of the NTxP 2000 is to de-reserve the garment industry from the small scale sector, in order to provide for larger scale investment in this sector, the benefits of economies of scale, and the competitive viability for exports; thereby to have the capacities to meet large orders & respond to expanding markets. Expansion in the size of the sector as a result of this action is also expected to provide increased employment.

Necessary notification to de-reserve the garment industry has been issued by the Ministry of Commerce and Industry (Department of Industrial Policy & Promotion) on 01.01.2001. Garment units now have the opportunity to invest and grow if they wish to.

GREATER THRUST TO EXPORTS
Exports of textiles and clothing (including handicrafts, jute and coir) during the period have shown an encouraging upward movement. In 1999-2000 textile exports showed an increase of 6.1% in dollar terms as against a growth of only 2.6% in the previous year, in a world market in which textile exports have grown at only 3%.

During the period April-October 2000, textile exports have registered an increase of 12.6% in rupee terms over the corresponding period of 1999-2000. Readymade garments sector has proved to be the dominant constituent of the textile export basket - a good sign, implying domestic value addition of a globally acceptable standard. During the period, cotton textile exports went down by 5.7%, man made textiles by 10.6.%, wool and woollens by 19.0%, coir by 3.6%, and textile exports went up for readymade garments by 6.4%, Silk by 3.1%, handicrafts by 9.4% and Jute by 5.4%. The Ministry of Textiles aims to achieve an ambitious export target of 15.5 billion US $ during the current financial year.

NEW GARMENTS AND KNITWEAR EXPORT ENTITLEMENT (QUOTA) POLICY 2000-2004
In November 1999, the Government announced a New Long-term Textiles Garments Export Entitlement (Quota) Policy 2000-2004 to make the most of the remaining period of the quota regime. Some of the important features of the new Policies include :-
- Phased utilisation of quota;
- Linking of quota for new investment with the TUFS;
- Making new investment quota entitlements non-transferable.
The Policy has been amended to streamline the provisions governing appeals against the EMD/BG of future orders passed by the apparel bodies. The revised provisions serve the twin purpose of ensuring recoveries of government revenues and at the same time striving to remove the practical difficulties in availment of legal undertaking facility by the eligible exporters.

LIBERALISATION OF IMPORTS UNDER EPCG
In the Exim Policy announced for the year 2000-2001, all the capital goods of the textile sector have been covered under Export Promotion Capital Goods Scheme with 5% customs duty without any countervailing duty and additional customs duty. Earlier specified items of textile machinery were covered under the EPCG Scheme.

SUCCESSFUL RESOLUTION OF DIFFERENCES WITH MAJOR TRADING PARTNERS
Consultations have been held with the European Union and United States, in which long standing differences over implementation issues have been successfully resolved. Pursuant to the consultations, the EU has agreed to release 8000 tonnes of exceptional flexibilities each year during the remaining years till 2004. EU and US have lifted their objection on the Indias revised tariff binding notification. Besides, US has also extended GSP concessions on 9 Indian handloom fabric lines, as per agreement.

The dispute with the European Commission for imposing an anti dumping duty on imports of cotton type bed linen has been taken to the Dispute Settlement Body of WTO and a ruling obtained against the EC's action on several points.

JOINT BUSINESS GROUP
An Indo-Australia Joint Business Group on natural fibres and textiles has been set up to increase bilateral trade and investment in fibres and textiles between the two countries and to encourage technological upgradation by collaborative projects involving R&D, transfer of technology and enhancement of technical skills.

JUTE PACKAGING
For enhancing the percentage of mandatory packaging in jute bags for sugar and foodgrains to 100% each and for urea to 20%, Government have issued an order on 25.10.2000 under the Jute Packaging Materials (Compulsory Use in Packing Commodities) Act 1987.The order shall be effective tillJune 30 , 2001.

MARKING OF JUTE TEXTILES
Through its order of December 8, 2000 Government has directed all manufacturers of jute textiles to mark the country of manufacture/origin of specified items of jute textiles.The order shall be effective tillSeptember 30, 2001.

EMA SCHEME AMENDED
Two amendmentshave been made in Export Market Assistance(EMA) Scheme on various jute products since its coming into effect i.e, April 1, 2000.By the first amendment the scheme has been extended to all fabrics from May 1, 2000 and through the other the list of jute products covered has been expanded to include cordage, cable and rope and twine of specified value.The latter amendment would be effective from October 9, 2000.Both amendments will have effect till March 31, 2001.

NATIONAL CENTRE FOR DESIGN & PRODUCT DEVELOPMENT
Two National Design & Product Development Centres, one at New Delhi and the other at Moradabad have been set up for design and technology related needs of the handicraft sector, and also to provide services of reputed national and international design experts to the sector.

SETTING UP OF URBAN HAATS
A new scheme for setting up of Urban Haats on the pattern of the successful Dilli Haat has been introduced to provide permanent marketing infrastructure facilities for artisans. Eight such Haats have been sanctioned at Ahmedabad, Agra, Bhubaneswar, Calcutta, Ranghi, Jammu, Karnal & Tirupati.

SETTING UP OF INDIA EXPOSITION MART
It has been decided to set up an all India Exposition Mart to provide support to cottage and small scale handicrafts units/exporters in marketing of products through a permanent contact point within Delhi with access to foreign importers or wholesalers of handicrafts. The Mart will be a centralised and permanent contact point, open throughout the year for buyers-sellers interaction. The proposed Mart will be a state of art project having an exposition area proposed to house approx. 600-700 outlets and a Resource Centre with latest IT facilities.

NATIONAL COMPUTER AIDED DESIGN CENTRES FOR HANDLOOMS
In the changing global fashion world, Computer Aided Design Systems play a vital role. Fabric simulation techniques available in this system help to create a fabric like image on the computer screen that makes it unnecessary to weaving sample cloth. The Government has launched a scheme for setting up of Computer Aided Design Centres in various powerloom clusters in the country back so that computer aided design catches up in a big way.

DELEGATION TO AUSTRALIA
A delegation led by the Hon'ble Minister ofTextiles visited Australia on the invitation of the Government of Australia to discussthe bilateral issues during the period November 5-11, 2000.During his visit, several issues like Marketing, Outward Processing Trade and Generalised System of Preference, etc. were discussed with the Federal Ministers of Australia for Foreign Trade and for Agriculture, Fisheries & Forestry.

FACILITATION COUNTER
A facilitation Counter has been established near gate No 3 of the Building i.e. Udyog Bhawan New Delhi to make information readily available to the customers/consumers and if required, arrange their interaction with the concerned authorities in the Ministry to answer their queries. A complaint box has also been kept near the facilitation counter to enable customers/consumers to lodge their complaints, if necessary.

GOLDEN JUBILEE OF RAJBHASHA POLICY
On completion of 50 years of Rajbhasha Policy of the Government, Ministry of Textiles and other attached and subordinate organisations under its administrative control have observed the Golden Jubilee Year of Official Language from 14.9.1999 to 14.9.2000.

To celebrate this, special meetings of Official Language Implementation Committee of the Ministry were held. Hindi workshops were organised in which fruitful discussions took place for the progressive use of Hindi in the official work. Winners of the various competitive events held to celebrate Golden Jubilee Year of the Official Language were given awards on 8.11.2000. The awards comprised cash as well as certificates.