SPINNING SECTOR

Despite the thrust given by the Textile Policy of 1985 to the spinning sector, resulting in considerable modernisation, 80 percent capacity utilisation, and a 20 percent share of global cotton yarn exports, cotton spinning still suffers the problems of over-capacity and of obsolete spindleage. This policy will continue the effort to modernise and upgrade technology to international levels, and take the following steps, in cotton spinning as well as the worsted woollen sectors:

• Encourage the spinning sector to continue to modernise;
• Liberalise and encourage export of cotton yarn; and
• Review from time to time the hank yarn obligation while ensuring supply of adequate quantity of yarn to the handloom sector.

WEAVING SECTOR

Despite a 58% global share of looms, consisting of 3.5 million handlooms and 1.8 million powerlooms, technology still remains backward. This sector, critical to the survival of the Indian textile industry and its export thrust, will be rapidly modernised. Clustering of production facilities in the decentralised sector will be encouraged to achieve optimum size and adopt appropriate technology.

The Government will facilitate harmonious development of all the segments of the fabric manufacturing sector. The balanced growth of these sectors will be achieved based on their intrinsic strengths and capacity to meet the demands and requirements of the domestic as well as international markets.

ORGANISED MILL INDUSTRY

Efforts will be made to restore the organised mill industry to its position of pre-eminence to meet international demand for high value, large volume products. For this purpose, the following measures will be initiated:

• Integration of production efforts on technology driven lines;
• Encouragement to setting up of large integrated textile complexes;
• Strategic alliances with international textile majors, with focus on new products and retailing strategies;
• Creation of awareness and supportive measures for application of IT for upgradation of technology, enhancement of efficiency, productivity and quality, better working environment and HRD.

Government recognises that employment protection in a terminally sick industrial unit is neither conducive to efficient allocation of scarce resources nor incremental employment generation. Hence, emphasis will be laid on a pragmatic and rational exit policy with adequate protection of the workers' interests. Appropriate measures will be taken, including review of the existing Textile Workers' Rehabilitation Fund Scheme, to mitigate the problems of displaced workers, on whom the consequences of closure of private mills, with no terminal or statutory benefits being given, have been serious.

The earlier policy of not taking over/nationalising sick units will be continued. As regards the unviable Public Sector Undertakings such as National Textile Corporation and National Jute Manufacture Corporation, various options for strategic partnerships or privatisation will be explored. Non-viable mills will be closed down with provision for an adequate safety-net for the workers and employees.