ANNUAL REPORT 2000-2001--ORGANISED TEXTILE MILL INDUSTRY

MINISTRY OF TEXTILES - ANNUAL REPORT 00-01

Cotton/ Man-made Fibre Textile Mill Industry is the single largest organised industry in the country employing nearly 10 lakh workers. Besides this, there are a large number of ancillary industries dependent on this sector such as those manufacturing various machinaries, accessories, stores, ancillary and chemicals. Even on a modest assumption that a worker’s family comprises five persons, the direct dependents on the organised textiles mill industry itself work out to about 50 lakhs. The salient aspects of this industry are discussed in the following paragraphs.

CAPACITY
The Indian Textile Industry has witnessed a phenomenal growth during the last four decade. The spindleage increased from 11 million in 1951 to over 35.41 million and rotors from 45 thousand in 1989 to 395 thousand as on 31.12.2000. The loomage however, declined from 1.50 lakh in March 1994 to 1.23 lakh in Dec., 2000(P) in the organised sector. The growth in capacity in spinning and weaving sectors of the industry since 1994 is as mentioned in Table 3.1.

Out of 1842 cotton/man-made fibre textile mills as on 30-12-2000, 192 mills are in the public sector, 155 mills in the co-operative sector and 1495 mills are in the private sector.

CAPACITY UTILISATION
The capacity utilisation in the spinning sector of the organised textile mill industry decreased from 84 percent in 1993-94 to 79 percent in 1998-99, but it again increased to the level of 83% during the year 1999-2000(P), while the capacity utilisation in the weaving sector of the organised textile mill industry has remained between 51 to 56 percent during the last six years. A statement giving the capacity utilisation in cotton / man-made fibre textile mills is as mentioned in Table 3.2.

GROWTH IN CAPACITY IN THE ORGANISED MILL SECTOR

Year Ending	No. of Mills				Installed Capacity
	Spg	Comp.	Total	Spindles (Mn.)	Rotors (‘000)	Looms (‘000)
31.03.1994	909	266	1175	28.60	139	150
31.03.1995	1148	268	1416	30.70	185	139
31.03.1996	1294	275	1569	31.75	226	132
31.03.1997	1438	281	1719	33.15	276	124
31.03.1998	1504	278	1782	33.88	313	124
31.03.1999	1543	281	1824	34.72	383	123
31.03.2000	1565	285	1850	35.10	392	123
31.12.2000	1561	281	1842	35.41	395	123

Table 3.2
Capacity utilisation in the textile industry

Year	Spinning Capacity		Weaving Capacity
	Installed Spindles	Utilisation	Installed Looms	Utilisation
	(Million)	(Percentage)	(‘000)	(Percentage)
1993-94	28.60	84	150	54
1994-95	30.70	81	139	51
1995-96	31.75	86	132	53
1996-97	33.15	86	124	52
1997-98	33.88	85	124	52
1998-99	34.72	79	123	51
1999-2000(P)	34.85	83	123	51
P = Provisional

PRODUCTION OF SPUN YARN
The production of spun yarn has increased from 1652 million kgs. during 1989-90 to 3046 million kg. during 1999-2000. The production of spun yarn during the period April 2000 to December, 2000 is provisionally estimated at 2379 mn. kg. The above data include the production of yarn from SSI spinning sector as well. The contribution from the SSI sector has been about 5% in the total spun yarn production. A statement showing the production of spun yarn (including SSI units) during the last eight years along with anticipated figures for the current year is as mentioned in Table 3.3.

Table 3.3
Production of Spun Yarn-----(In Mn. Kg.)

Year	Cotton	Blended	100 % Non-Cotton	Total Yarn
1993-94	1697	305	140	2142
1994-95	1696	346	158	2200
1995-96	1894	395	196	2485
1996-97	2148	484	162	2794
1997-98	2213	583	177	2973
1998-99	2022	595	191	2808
1999-2000	2204	621	221	3046
2000-2001 (P)	1718	476	185	2379
P = Provisional

The pattern of production of cotton yarn during the last eight years along with anticipated figures for the current year is as mentioned in Table 3.4
Table 3.4
Count - Wise production of cotton Yarn -----(In Mn. Kg.)

Count	93-94	94-95	95-96	96-97	97-98	98-99	99-00	00-01 (April-Nov.)
1-10s	278	282	310	479	503	450	509	352
11-20s	385	389	415	511	508	489	504	315
21-30s	314	321	391	405	427	396	455	327
31-40s	494	470	490	515	542	468	524	375
41-60s	144	145	153	136	144	131	131	94
61-80s	45	46	95	60	52	49	44	33
81s- and above	37	43	40	42	37	39	37	26
Total	1697	1696	1894	2148	2213	2022	2204	1522
A — Anticipated P — Provisional

Deliveries of Hank Yarn ----- (In Mn. Kg.)

Count	92-93	93-94	94-95	95-96	96-97	97-98	98-99	99-00	00-01 (April-Nov.)
Year	92-93	93-94	94-95	95-96	96-97	97-98	98-99	99-00	00-01 (April-Nov.)
Cotton	377	422	438	504	519	540	473	514	354
Blended	1	—	1	1	4	5	8	9	7
100 %Non-Cotton	37	42	51	66	67	53	48	51	35
Total	415	464	490	571	590	598	529	574	396
P = Provisional A = Anticipated

SICKNESS / CLOSURE OF TEXTILE MILLS
As on 30-12-2000(P), there were 1842 mills, consisting of 1561 spinning mills and 281 composite mills. Out of this, 382 Cotton/Man-made fibre textile mills (265 Spinning and 117 Composite) with an installed capacity of 8. 91 mn. spindles, 45,436 rotors and 66,800 looms were reported to be closed as on 30.12.2000

The incidence of sickness and closure in the organised textile industry has been a matter of concern. One main reason of sickness is structural transformation resulting in the composite units in the organised sector losing ground to power looms in the decentralised sector, on account of the latter’s greater cost effectiveness. The other causes of sickness / closure of the industry include low productivity due to lack of modernisation, stagnation in demand and inability of some units to expand in the export market, increase in the cost of inputs, difficulties in getting timely and adequate working capital, etc. The details of closure of cotton /man-made fibre textile mills is given in Table 3.5.
Closure of cotton man-made fibre in textile industry

Year /Month	No. of Mills			Installed Capacity		Employees on roll
	Spg	Comp.	Total	Spindles (‘000)	Rotors (No.)	Looms (‘00)
1992-93	64	59	123	3520	1776	366	178
1993-94	75	57	132	3590	3232	362	173
1994-95	74	58	132	3652	3904	366	178
1995-96	100	71	171	4668	6589	450	228
1996-97	118	91	209	5469	9270	542	252
1997-98	127	93	220	5752	10813	553	260
1998-99	207	106	313	7487	25534	606	311
1999-2000	240	109	349	8408	31408	726	334
2000-2001	265	116	381	8791	38083	746	346
(Upto 30.09.2000)

MEASURES TAKEN BY THE GOVERNMENT TO TACKLE THE PROBLEM OF SICKNESS
i) Setting up of Board for Industrial and Financial Reconstruction (BIFR) for timely detection of sickness and potentially sick companies and for taking preventive, ameliorative, remedial and other measures which need to be taken with respect to such companies.
ii) Setting up of Textile Workers’ Rehabilitation Fund Scheme (TWRFS) to protect the interests of the workers of the closed mills.
iii) Financial institutions and Banks are also required to closely monitor the incidence of growing sickness.
iv) The Expert Committee on Textile Policy constituted in 1998 has submitted its report. The report has addressed problem of sickness in the textile sector and has made some recommendations which are under examination.

BOARD FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION (BIFR)
As per the information obtained from the Board for Industrial and Financial Reconstruction, there were 445 cases of textile mills registered with BIFR as on 30.4.2000. Number of mills State-wise registered with BIFR is given in Table 3.6.

Name of the State/UT		No.of Mills
1.	Andhra Pradesh	33
2.	Assam	04
3.	Bihar	03
4.	Gujarat	76
5.	Haryana	22
6.	Himachal Pradesh	01
7.	Karnataka	22
8.	Kerala	06
9.	Madhya Pradesh	19
10.	Maharashtra	85
11.	Orissa	04
12.	Punjab	12
13.	Rajasthan	22
14.	Tamilnadu	72
15.	Uttar Pradesh	36
16.	West Bengal	17
17.	New Delhi	08
18.	Chandigarh	01
19.	Dadra & Nagar Haveli	02
	TOTAL	445

Status of textile mills registered with BIFR as on 30/4/2000

1.	Dismissed as non-maintainable	65
2.	Scheme sanctioned by the AAIFR	07
3.	Scheme sanctioned under section 17(2) of the SICA 1985.	03
4.	Scheme sanctioned under section 18(4) of the SICA 1985.	56
5.	Winding up recommended under section 20(1) of the SICA 1985.	115
6.	Draft Scheme circulated	13
7.	Winding up notice issued	16
8.	Failed and Reopened	06
9.	Remanded by the AAIFR/Court	02
10.	Stayed by Court/AAIFR	06
11.	Under Enquiry	120
12.	Declared no longer sick	26
13.	Dropped, net worth became positive	04
14.	Others	06
	TOTAL	445

TEXTILE WORKERS’ REHABILITATION FUND SCHEME (TWRFS)
Textile Workers’ Rehabilitation Fund Scheme came into force with effect from 15th Sept. 1986.
The objective of TWRFS is to give interim relief to the worker rendered jobless due to permanent closure of the mills. Relief under the scheme is available only for 3 years on a tapering basis, 75% of the wage equivalent in the first year, 50% in the second year and 25% in the third year.

Criteria for mills’ eligibility:-
(I) A closed textile mill should be licensed under the I (D & R) Act,1951 or registered with Textile Commissioner as a medium scale unit on the date of the closure.
(II) It has obtained the requisite permission for closure from the appropriate State Government under Section 25(0) of the Industrial Disputes Act., 1947, or taken over by Official Liquidator appointed by the High Court, and
(III) The unit was closed down on or after 6th June, 1985.

By an amendment, TWRFS is also now made applicable to the cases of partial closure on a case to case basis. Partial closure is restricted to cases-wherein the State Government recommends that an entire uneconomic activity is scrapped as a part of rehabilitation package for sick/weak mill (as per RBI definition) approved by Nodal Agency/BIFR, provided the scrapped capacity is surrendered for cancellation and endorsement is made on the licence/Registration certificate to that effect.

In both the cases (i.e. permanent closure and partial closure) the scheme is applicable to workers who have been earning wage equivalent upto Rs.2,500/- per month.

The following conditions are necessary for workers to become eligible for getting relief under TWRFS:
i) The workman should have been continuously employed for 5 years in the closed textile units as on the date of closure; and
ii) He should be on the records of the Regional Provident Fund Commissioner.

Since the inception of the Scheme as on 31.12.2000, 31 units in Gujarat, 4 units in Tamil Nadu, 1 unit in Delhi, 3 units in Maharashtra and 2 unit in Madhya Pradesh making a total of 41, were found eligible under the scheme. A total of 65197 workers of 41 mills have been disbursed relief of an amount of Rs.143.68 crore upto 30.12.2000.

During the current financial year, i.e. 2000-2001 upto 31.12.2000, Government released Rs.18.00 crore of which an amount of Rs. 1799/- lakh covering 5736 workers has already been disbursed.

TECHNOLOGY UPGRADATION FUND SCHEME (TUFS) Government of India, Ministry of Textiles has launched a Technology Upgradation Fund Scheme (TUFS) for the Textile and Jute Industries which is in operation since 1/4/99 for 5 years i.e. upto 31/3/2004. There is no cap on funding under this scheme. It is an open-ended scheme depending on the capacity of the industry to absorb funds in bankable and techno-economically feasible proposals.

The main features of the scheme are given below:
i) The scheme will provide a reimbursement of 5% point on the interest charged by the lending agency on a project of technology upgradation in conformity with the scheme.
ii) The identified sectors in the textile industry viz. silk reeling and twisting, wool scouring and combing, synthetic filament yarn texturising, crimping and twisting, spinning; manufacturing of viscose filament yarn (VFY); weaving/knitting including non-woven, fabric embroidery, technical textiles, garments/made-up manufacturing; processing of fibres, yarns, fabrics, garments and made-up and Jute industry are eligible to avail of these concessional loan for their technology upgradation requirements. Investments in common infrastructure or facilities by an industry association, trust or co-operative society in an industrial estate and other investments specified are also eligible for funding under the scheme.
iii) Technology levels are bench marked in terms of specified machinery for each sector of the textile industry. Machinery with technology levels lower than that specified will not be permitted for funding under the TUF Scheme.
iv) General eligibility condition and sector specific eligibility conditions have also been specified in the scheme.
v) Nodal agencies for the scheme are as follows:
For the Textile Industry (excluding SSI Sector) : IDBI
For the SSI textile sector : SIDBI (Weaving knitting, processing & garmenting manufacturing)
For Jute Industry : IFCI
vi) The SIDBI has co-opted 138 Financial Institutions comprising of 81 commercial banks 9 co-operative Banks, Exim Bank, NCDC and 46 State Financial corporations/ State Industrial Development Corporations/ Twin Function Industrial Development Corporation for wider and effective reach of the scheme to all sectors of the textile industry including the de-centralised sector. Similarly, IDBI has co-opted 83 financial institutions comprising of 4 AIFI’s, Exim Bank, 30 Scheduled Commercial banks and 46 SFCs/SIDC’s/Twin Function IDC’s and / Co-operative bank.
vii) The functioning of the scheme is being periodically monitored by an Inter-Ministerial Steering Committee, chaired by Secretary (Textiles). The progress of sanction and disbursement under the scheme is given in Table 3.7.

PRODUCTION OF CLOTH & EMPLOYMENT GENERATION
The weaving capacity in the organised mill sector had been stagnant for a number of years. The situation has not changed even with the removal of restriction in the creation of capacity in the textiles sector as permitted by the Textile Policy of 1985. The production of cloth in the mill sector in 1999-2000 was 1714 mn. sq. mtr. as compared to the production of 1990 mn. sq. mtr. in 1993-94. The data on production of cloth in the mill sector, the handloom sector, hosiery sector & the power loom sector during the past six years are setout as given in Table 3.8. The employment generation in cotton/man-made fibre textile industry as on 30/10/2000(P) was 9.96 lakh.
Click Here to see Table 3.7

Note:
(i) PLIs includes Bank of Baroda, Punjab National Bank, Canara Bank, State Bank of Indore, State Bank of India, State Bank of Travancore, Indian Overseas Bank, Karnataka Bank Ltd., Andhra Bank, Rajasthan Financial Corporation , Punjab Financial Corporation, Gujarat Industrial Investment Corporation, Punjab State Industrial Development Corporation Ltd., Andhra Pradesh State Financial Corporation, Rajasthan Industrial Investment Corporation Ltd., Economic Development Corporation of Goa, Tamilnadu Mercantile Bank Ltd., Haryana State Industrial Development Corpn. Ltd., Oriental Bank of Commercial, Karur Vysya Bank Ltd., Union Bank of India, The Surat Textile Traders Co-op Bank Ltd., The Surat Peoples Co-op Bank Ltd., Bharat Overseas Bank, Catholic Syrian Bank, West Bengal Financial Corporation, Karnataka State Financial Corporation, Gujarat State Finance Corporation, Maharashtra State Financial Corporation, Tamilnadu Industrial Investment Corporation Ltd., Federal Bank, The South Indian Bank, Bank of Madura Ltd., Corporation Bank, Vijaya Bank, Syndicate Bank, Global Trust Bank Ltd., The Sangli Bank Ltd., Haryana Financial Corporation.
(ii) The Bank of Tokyo-Mitsubishi Ltd., BHF-Bank, Societe Generale, SBI Commercial and Internatiional Bank, Sanwa Bank, BNB Paribas, Indian Bank, The Lakshmi Vilas Bank Ltd., Development Credit Bank Ltd., Scotia Bank, The Lakshmi Vilas Bank have submitted ‘NIL’ information.
Click Here to see Table 3.8