CHAPTER 2 TEXTILE INDUSTRY IN INDIA

CHAPTER 2 TEXTILE INDUSTRY IN INDIA

2.1 INTRODUCTION CHAPTER 2 TEXTILE INDUSTRY IN INDIA 2.2 ORGANIZATIONAL STRUCTURE OF TEXTILE INDUSTRY 2.3 CLASSIFICATION OF TEXTILE INDUSTRY 2.4 GROWTH OF TEXTILE INDUSTRY IN INDIA 2.5 GROWTH OF TEXTILE INDUSTRY IN MAHARASHTRA 2.6 PRODUCTION OF SPUN YARN 2.7 GROWTH OF MAN-MADE TEXTILE UNITS 2.8 EXPORT PERFORMANCE OF THE TEXTILE INDUSTRY H 2.9 PERPARING FOR THE FUTURE CHALLENGES 2.10 TEXTILE POLICY OF 1985 2.11 NEW TEXTILE POLICY 2000 2.12 RECENT GOVERNMENT POLICIES 4 2.13 SUMMARY

CHAPTER 2 TEXTILE INDUSTRY IN INDIA 1. INTRODUCTION In the present chapter at an attempt is made to present the status of textile industry in India as the back drop of the research work. Cotton textile industry is one of the well organized oldest and most firmly established major industries in India. At the end of March 2002 there were 1846 mills in the country (1565 spinning mills and 281 composite mills) with 28 million spindles and 1.6 lakh looms. There were 113 closed mills by the last three years1. The structure of the textile industry is extremely complex with the modem, sophisticated and highly mechanized mill sector on the one hand and the hand-spinning and hand -weaving (handloom) sector on the other. In between there is decentralized small-scale powerloom sector. The cotton and synthetic textile industry in India is the largest industry in the country accounting for about 20 percent of the industrial output, providing employment to over 20 million persons and contributing around 33 percent of the total export earnings. The textile industry can be described as major industry of India in which cotton and cut stapled man made fibers is converted into yam and 28

fabrics. Mostly for apparel and domestic uses. Just as industrial revolution started in England with textile manufacture getting mechanized so did the transformation of the agricultural economy of our country into an industrial economy in the establishment of textile mills2. The Indian textile industry is predominantly cotton based with 65 percent of the fabric production in the country being accounted for by cotton. Production of raw cotton varies from year to year depending upon rainfall and weather conditions. The price fluctuations in raw cotton affect the industry. Production of yam is almost entirely in the organized sector and it has been showing a steady increase from 1600 million kg in 1988-89 to over 2,980 million kg in 1997-98. The fabric production has also recorded an increasing trend over the years, from i 20,600 million meters in 1989-90 to 36,700 million meters in 1996-97. In the production of fabrics the decentralized sector accounts for 95 percent and the mill sector accounts for 5 percent only3. The Indian textile industry is one of the oldest industries in the country and displays a very complex sector dispersal matrix with hand spun and hand woven sector on one end of the spectrum and the capital intensive sophisticated mill sector at the other, with the decentralized powerloom and knitting sectors coming in between. Even in the organized sector, island of excellence exists using highly sophisticated 29

information technology for ERP/SAP, which are second to none in the world. t % The diverse structure of the industry along with it s close linkage with our ancient culture and tradition provides it with the unique capacity to produce with die help of latest technological inputs and design capability a wide variety of products suitable to the varying consumer tastes and preferences, both within the country and abroad. It is the only industry in the Indian industry arena which is self- reliant and complete in value chain i.e. from raw material to the heights value added products i.e. garments or made-ups. The Indian textile industry has a significant presence in the Indian economy as well as in the international textile economy. Its contribution to the Indian economy is manifested in terms of its contribution to the industrial production, employment generation and foreign exchanges earnings. The Indian textile industry also contributes significantly to the world textile production capacity and availability of textile fibers / yams. This industry contributes about 21 percent to the world spindleage and 6 percent to the world rotorage with China, dismantling of 10 million spindles India has emerged as a country with highest spindleage in the world. With almost 5.64 looms (including 3.89 million 30

handlooms), this industry has also the highest loomage (including handlooms) in the world and contributes about 57 percent to the world loomage. Even excluding handlooms this industry contributes 33 percent to the world loomage. This industry also contributes significantly to the world production of textile fibers and yams including jute. In the world textile scenario, it is the largest producer of jute, second largest producer of cotton and cellulose fibre / yam and fifth largest producer of synthetic fibre / yam. It is also the third largest producer of cotton yam. A study by the International Textile Manufacturers Federation (ITMF) has also indicated that this industry enjoys comparative cost advantage in raw material cost and labour cost in the production of various textile items vis-a-vis major textile-producing countries4. 31

2. ORGANIZATIONAL STRUCTURE OF TEXTILE INDUSTRY groups. The textile industry may be broadly classified in to two main a) Cotton textile industry is further divided into mills (Spinning and composite), powerlooms and handlooms. Sectors such as Khadi, Hosiery and garments and independent processing units. b) Non-cotton textile industry i.e. the sector mainly including different fibers viz, Silk, Rayon, Woolen, Synthetics sectors there are spinning units, units as well. This second group also has small sectors of hosiery and processing and Garments, Besides, there is also woolen carpet industry in some selected centers. 3. CLASSIFICATION OF TEXTILE INDUSTRY Textile Industry I ' Organized Sectors Decentralized Sectors Mill Sector (Textile mills, large Processing units) 1 Handlooms i I ^ 1 Powerlooms i S Private Co-Op Private Co-Op 32

The textile industry can also be broadly classified into organized and decentralized sectors. In the organized category there are cotton textile mills, both spinning and composite, non-cotton mills, both spinning and weaving units and a number of large processing houses. In the decentralized sector there are handlooms and powerlooms producing variety of products in different parts of the country. 2.3.(a)Mill Sector The cotton textile industry in India is the largest single organized industry in the country that directly employs about 12 lakh persons. Besides there are a large number of ancillary industries depending upon this sector. On the assumption that a worker s family comprises of five persons, the direct dependence on the organized textile industry works out to about 60 lakhs. The cotton mill industry witnessed a rapid growth of spinning side during the last six decades. The number of units in the industry went up from 107 to 1565 while spindleage increased from 11.25 million to 35.53 million. The growth of loomage has however been insignificant on account of the freeze imposed by Government Policy to protect the handlooms5. 33

2.3(b) Handlooms The handloom sector is the second largest unorganized economic activity after agriculture and provides the maximum employment in the rural areas, next to agriculture. The number of handlooms in the country has gradually gone up from about 28 lakhs in 1951 to about 38.91 lakhs in 2001-2002. A majority of these handlooms work on cotton, while a few also utilized other raw materials like silk, wool, art silk and other man made fibers. The production of the cotton cloth by the handloom sector has increased from a level of about 1240 million meters in 1951 to 8049 million meters in 2001-2002. The handloom sector also produces fabrics but no reliable figures of these are available. The handloom sector mainly produces dhoties, sarees, lungies, towles, bedsheets and furnishing materials. 2.3(c) Powerlooms The powerloom sector is of comparatively recent origin. Since the 50 s the capacity of powerloom sector increased substantially year after year. Because of operational advantages enjoyed by the powerloom sector in comparison to the mill sector and partly because of financial concessions the production capacity in the powerloom sector increased substantially and therefor the Govt, had to go on regularizing the 34

powerlooms from time to time. First powerloom was installed in Ichalkaranji in Maharashtra. The sector depends upon the mill sector for its supply of yam, mainly in the form of canes and beams. Most of the powerloom owners are small scale operators, who depend upon the master weavers or merchants who give them yam on credit and purchase the gray fabrics by paying them conversion cost. Their small powerloom weavers are not entrepreneur in their own right but are only converters. The master weavers or merchants get the fabrics processed and sell them in the market6. 4. GROWTH OF TEXTILE INDUSTRY The growth of textile industry in India is the result of the Government policy of encouraging the decentralized cloth production for ensuring greater employment. The policy prevented composite mills from increasing looms capacity, gave protection through differential excise duties and product reservation to the decentralized sector. The slow rate of increase in manpower engaged is the result of the continuous efforts put in by the industry to increase the labour productivity. India has already completed more than 55 years of its independence. The analysis of the growth pattern of the different 35

segments of the industry during the last five decades of post independence era reveals that the growth of the industry during the first two decades after the independence had been gradual though lower and growth had been considerable. The growth there after was significantly rapid the fourth decade in each and every segment of the industry. The peak level of its growth has however been reached during the fifth decade i. e. the last ten years and more particularly in the 90 s7. The textile policy of 1985 and economic policy of 1991 focusing in the direction of liberalization of economy and trade had in fact accelerated the growth in 1990 s. The growth during this period was spearheaded by the spinning and man made fibre industry in the organized sector and decentralized weaving sector. In the last ten years from 1990-91 to 2000-018. 36

MAP No. 2.1 DISTRIBUTION OF COTTON TEXTILE INDUSTRY IN INDIA 3?

Sr. No. Year March End Table 2.1 Growth of Textile Mills in India (1951 to 2001) Number of Mills Spinning Composite Total Spindle Installed (Million) Looms Installed (Million) 1 1951 107 276 383 11.25 196 2 1961 196 285 481 13.83 199 3 1971 379 291 670 17.98 206 4 1981 415 278 693 21.23 208 5 1990 770 281 1051 26.59 181 6 1991 777 285 1062 26.67 178 7 1992 846 271 1117 27.82 169 8 1993 874 268 1142 28.09 158 9 1994 909 266 1175 28.60 150 10 1995 1148 268 1416 30.70 139 11 1996 1294 275 1569 31.75 132 12 t 1997 1438 281 1719 33.15 124 13 1998 1504 278 1782 33.88 124 14 1999 1543 281 1824 34.72 123 15 2000 1565 285 1850 35.10 123 16 2001 1565 281 1846 35.53 123 (Source: Textile Commissioner Government, of India, 2001 ) 38

Figure No. 2.1 Growth of Textile Mills in India (1990 to 2001) Number of Mills Year Spinning Composite It can be seen from the above table that throughout the planned period the number ot composite textile mills is more or less stable, however there is gentle increase in the number of spinning mills. Now this concept is outdated so the growth of textile mills consists of spinning mills with spindles and weaving mills with looms as separate entities of production of textile. Thus the growth and performance of Indian textile industry can be studied in terms of the growth of spinning mills along with the spindles and the looms capacity. As stated in table number 2.1 the no of spinning mills has increased almost four times from 107 in 1951 to 415 in 1981. Further it has reached to 1565 in 2001 from 777 in 1991. In terms of spindle capacity, 39

it has increased three times i. e. from 11.25 million spindles i.e. 1951 to 35.53 in 2001. The spindle capacity of these mills showed some marginal increase from 26.67 million spindles in 1991 to 35.53 million spindles in 20019. 5. GROWTH OF TEXTILE INDUSTRY IN MAHARASHTRA i * The state of Maharashtra has the prominent textile centers such as Mumbai, Solapur, Ichalkaranji Malegaon etc. The handloom sector is geographically spread over both in rural and urban areas. The performance of textile industry in Maharashtra is presented in Table No. 2.2 out of total cotton textile mills in India 20.16 percent (207) textile mills are developed in Maharashtra. The average annual production of spun yam was 361791 Thousand-kg and the average annual productions of fabric cloth were 614278 Thousand-sq. mtr. in 2000-2001, Regarding the employment the average number of persons employed in this industry was 180541 in the year 2000-2001. The co-operative sector plays an important role in the development of spinning co-operatives handloom co-operatives and powerloom co-operatives. It was recorded by All India Federation of Co-operatives Spinning Mills Limited Mumbai in its 19th annual report and reviews that out of 18,184 handloom co-operatives in India. i 40

Maharashtra was having 290 handloom co-operatives in the year 2001. Out of 67 spinning co-operative mills at all India level. Maharashtra State was having 42 in 2001. In the case of powerloom co-operatives Maharashtra occupies the second position next to Andhra Predesh. The composite mills received a setback due to the known technical economic reasons. The installed capacity of spinning mills shows very remarkable increase in the State of Maharashtra. The employment potential of the textile mills shows rather disappointing picture in almost all the states except Tamilnadu, West Bengal and Uttar Pradesh. The two states of Maharashtra and Gujarat are technologically advanced states as these states have been adopting automation leading to decline in employment potential. At the national level the state of Maharashtra stands second next only to Tamilnadu in terms of total number of textile mills. However Maharashtra has the maximum number of both co-operatives spinning mills i.e. 66 and centrally owned textile' mills is 45. The composite textile mills present a different picture. The state of Gujarat has maximum 92 composite mills where as Maharashtra get second position with 77 14300 41

MAP No. 2.2 DISTRIBUTION OF COTTON TEXTILE INDUSTRY INMAHARASTRA 42

Sr. No. composite mills. But again Maharashtra State stands first as regards the number of public sector composite mills, which are 31 since many 10 years. Table No. 2.2 Growth of spinning and composite Textile mills in Maharashtra (1989-90 to 2000-01) Year No. of Mills Spindles Rotors Looms Spinning Composite Total Installed Thousand Installed Number Installs Numbei 1 1990 44 78 122 4977 5012 62746 2 1991 44 78 122 4977 5012 61625 3 1992 58 78 136 4998 5692 60112 4 1993 81 77 158 5013 10356 55309 5 1994 105 76 181 5072 10737 49317 6 1995 105 76 181 5072 34725 48021 7 1996 106 75 181 5073 36668 44386 8 1997 109 75 184 5016 38708 43431 9 1998 109 77 196 5088 41312 42317 10 1999 124 77 201 50463 43860 41732 11 2000 128 77 205 5166 44364 41203 12 2001 130 77 207 5212 45972 41203 (Source: Textile Commissioner, Government of India, 2001)

Figure No. 2.2 250 t Growth of Textile Mills in Maharashtra (1990 to 2001) +4

Table 2.3 Production of Spun Yarn in India (In Million Kg ) (1950 to 20001) Sr. No. Year Cotton Blended mixed 100% Non mixed Total 1 1951 591 11 602 2 1961 862 22 884 3 1971 881 34 64 979 4 1981 1067 144 87 1298 5 1991 1510 207 107 1824 6 1992 1450 234 122 1806 7 1993, 1569 247 125 1941 8 1994 1679 305 140 2142 9 1995 1696 346 158 2206 10 1996 1894 395 196 2485 11 1997 2148 484 162 2794 12 1998 2213 583 177 2973 13 1999 2022 595 191 2808 14 2000 2204 621 221 3046 15 2001 2267 646 247 3160 (Source: Textile commissioner, Government of India* 2001) 45

Figure No. 2.3 Production of Spun Yarn in India (1951 to 2001) Million Kg. 195119611971198119911992199319941995199619971998199920002001 Year Non Mixed Blended Mixed Cotton 4-6

PRODUCTION OF SPUN YARN The increased production of yam has helped the growth of the textile industry in India. The production of spun yam over the last five decades has increased from 602 million kgs. in 1950-51 to 3160 million kgs. during 2000-2001 As a consequence, the production of spun yam has increased at the rate of about 5.65 percent to 3160 Mn. Kg. in 2001, of which cotton yam is about 72 percent. Number of looms has increased from 13.13 lakh in 1991 to 18.0 lakh in 2001. During the period loomage in the organized sector declined from 1.78 lakh to 1.40 lakh. Additionally handloom has grown to a loomage of 38.91 lakh taking the total loomage to 56.93 lakh6 11. * * * * 6. GROWTH OF MAN-MADE TEXTILE UNITS Most of the units manufacturing various fiber and filaments yam for the Man-made textile industries have come up during the 20 to 25 years. The cotton textile sector and woolen textile sector for the purpose of blending with other fibers use various Man-made fibers. Blended yam is used for the manufacture of Man-made fabrics, both by the organized sector as also by the decentralized sector. 47

There are also about Man-made fiber spinning units that have an installed capacity of about 598 lakh spindles. In the decentralized sector of the Man-made textile industry, there are about 12% organized Art silk mills with an installed capacity of about 16.65 lakh powerlooms. The following table depicts about the production of Man-made fabrics in India between 1950-51 to 1999-200012. Table No. 2.4 Production in the cotton and Man-made textile industry in India. Production of fabrics in million Percentage share of Sr. Year meters No. Mill sector Decentralized sector Total Mill sector Decentralized sector 1 1950-51 3730 1010 4740 79 21 2 1960-61 4640 2050 6690 69 31 3 1970-71 4050 3550 7600 53 47 4 1980-81 3430 4950 8370 41 59 5 1990-91 2590 20340 22930 11 89 6 1993-94 1990 25910 27900 07 93 7 1999-2000 1720 36910 38630 04 96 (Source : RBI, report on currency and finance, 1997-98 Vol. I and Economic survey 2000-01 ) 48

Figure No. 2.4 Production in the Cotton and Man-made Textile Induatry in India (1951 to 2000) Figure No. 2.5 Percentage of Share Textile Industry in India (1951 to 2000) Percentage of Share Million Meters Mill Sector I Decentralized Sector

It can be seen from above table that the production of fabric in the mill sector has declined from 3730 million meters in 1950-51 to 1720 million meters in 1999-2000. However the same has gone in case of decentralized sector from 1010 million meters in 1950-51 to 36910 million meters in 1999-2000. If we take the total of mill and decentralized sector the same has increased from 4740 million meters in 1950-51 to 38630 million meters in 1999-2000 registering a growth of 80 percentage in last 50 years. The share of the mill sector which at 79 percent in 1950-51 come down to 4 percent in 1999-2000 where as that of the decentralized sector including handlooms rose from 21 percent to 96 percent during the same period7 13. * * * * * 7. EXPORT PERFORMANCE OF THE TEXTILE INDUSTRY India is a leading exporter of cotton fabric and cotton apparel (ready-made garments). Through export friendly government policies and positive efforts by die exporting community textile exports increased substantially from US $ 5.07 billion in 1991-92 to US $ 12.10 billion during 2000-01. The ready-made garment sector is the biggest segment in the India s textile export basket contributing over 46 percent of the total textile exports. Exports of cotton based items continue to 50

per-dominate which is natural in view of India s competitive advantage in the advantage of cotton. Table No. 2.5 Share Of Textile Export In India Sr. No. Particulars Percentage 01 Readymade garments 46.10 02 Cotton textiles 29.34 03 Man-made textiles 9.06 04 Wool & Woolen textiles 0.43 05 Silk textiles 2.64 06 Handicrafts 10.34 07 Coir & Coir manufactures 0.40 08 Jute 1.69 Total 100.00 (Source: Office of the textile Commissioner Government of India - Mumbai, May 2001) 51

Figure No. 2.6 Share of Textiles Exports In India (1999-2000) Readymade garments Cotton Textiles Man-made textiles Wool & Wollen textiles Silk Textiles Handicrafts Coir & Coir manufacures Jute 52

Textile trade over the last decade has contributed a substantial and rising share of India s total exports. It has been contributing about 27-30 % to the India s overall export trade. Its share in die world textile trade has risen to 3.1 percent in 1999-2000 as against 1.80 percent in early nineties. Exports have growth at an average of 11 percent per annum over the last few years, while world textile trade has growth only about 5.4 percent per annum in the same years. The exports of textile and garments increased from Rs. 45504.8 crore to Rs. 55242.4 crore, registering a growth of 21 percent14. 8. PREPARING FOR THE FUTURE CHALLENGES The terms of the Agreement. Textiles and clothing (ATC) w.e.f. 01-01-2005, there will be no import restrictions (quota) for any category in any country and whole world would be an open international market without any restrictions on the import and export of textile and garments. The competition in international trade in textile is going to be intensified. Till now, Indian textile industry has been a protected or sheltered industry for efforts were being made only in export trade. But in an integrated world economy, it is a two process; we have not only to protect our domestic market because the thereat of import penetration is 53

real but also to increased our share in the international trade in textiles and clothing. While globalization offers unlimited opportunities it also is replete with threats from our competitors, particularly the export - led economics to destabilize our export and local markets. In order to withstand the competition both in international market and local market and accelerate our export growth1:1. 9. TEXTILE POLICY OF 1985 In June 1985, the Government of India announced new textile policy with the main objective to increase the production of cloth of acceptable quality at reasonable prices to meet the clothing requirements of a growing population. The new textile policy has proposed a restructured framework having the following three dimension. a. The industry is viewed in terms of stages of its manufacturing process, namely, spinning, weaving and processing. b. The industry is provided with fuller flexibility in the use of various fibers. 54

c. The industry is subjected to more pragmatic policies regarding creation or contraction of capacities by units in order to increase competition and promote healthy growth industry. As a natural corollary of the restructured framework the new textile policy states for the purpose of policy powerlooms in the organized mill sector and in the unorganized powerloom sector shall as for as possible be treated at par and allowed to complete on the basis of their inherent strength and capabilities similarly in the processors and processing houses in the mill sector is to be treated at par. The multi-fibre approach in the new policy is guided by the following considerations: I. Full fibre flexibility between cotton and Man-made fibre or yam is to be provided. II. Adequate availability of Man-made fibres or yam at reasonable prices is to be ensured by increased domestic production supplemented by imports. III. A fiscal levy on Man-made fibres or yam is to be progressively reduced to encourage domestic production so that the benefit flows to the consumer in the form of lower prices. 55

IV. The export windows are to be kept open for Man-made fibres or yam. Capacity expansion and capacity contraction is to be allowed to the mills, including their closure, wherever necessary and justified, provided worker interested are folly protected. Regarding the handloom sector to ensure higher earnings for handloom weavers greater emphasis is to be placed on the modernization of looms and provision of technological and other inputs for improving productivity of handlooms and the quality and finish of handloom products. Besides the production of mixed and blended fabrics on handlooms is to be encouraged. A contributory Thrift Fund Scheme (TFS) to provide assistance to handloom weavers during times of need was set up. Last but not the least the responsibility for the entire production of controlled cloth was transferred to the, handloom sector by the end of the seventh plan16. i 10. NEW TEXTILE POLICY (2000) On November 2, 2000 the Government of India announced the New Textile Policy to make India a global player in textiles and readymade garments by raising the industry s exports from $ 11 billion to $ 50 billion by 2010 out of this the share of readymade garments will be $ 25 billion. The Government has decided to deserve the garment 56

industry from the SSI category so as to make the industry' international more competitive. Till now the garment sector was under SSI reservation with an investment ceiling of Rs. 3 crores and the maximum limit of foreign direct investment of 24 percent. Two more modifications have been introduced firstly FDI limit of 24 percent has been removed and foreign companies will be able to make 100 percent investments through Foreign Investment Production Board (FIPB) route. Secondly percent export obligation on firms in which foreign equity is allowed has been removed. The Government did not agree to the recommendations of the Satyam Committee to abolish of handloom reservation act and removal of lank yam obligation due to social causes including the need to protect handloom weavers. The Government intends to implements in a time bound manner the Technology Upgradation Fund Scheme (TUFS) covering all manufacturing sectors of the textile industry. The response to this scheme has been improving and proposals amounting to Rs. 11,000 crores have been received. The main aim of the policy is to achieve an increase in cotton productivity by at least 50 percent by upgrading quality to global standards through the effective use of the Technology Mission Cotton. 57

Similarly NTP proposes to launch a Technology Mission on to enhance productivity and diversification. Efforts should be made to assist the private sector to set up specialized financial arrangements to fund the diverse needs of the textile industry, besides setting up a venture capital fund for technology-based entrepreneurs. For the spinning sector the National Textile Policy (NTP) would continue to modernize, liberalize and encourage export of cotton yam and review the lank yam obligation while encouraging adequate quantity of yam to handloom weavers. Since technology in the weaving sector still remains backward if shall have to be rapidly modernized. On the question of privatization of sick.units of the National Textile Corporation (NTC), the Textile Minister is of the view that the Government will undertake unit wise review before taking any decision in the matter. However, the policy concedes that employment protection in a terminal sick industrial unit is neither conductive to efficient allocation of resources nor incremental employment generation. The textile Minister, therefore, emphasized that a pragmatic and rational exit policy will have to be worked out with adequate protection to workers interests17. 58

11. RECENT GOVERNMENT POLICIES The Government has adopted several policy measures to improve the health of the textile industry. a) The Textile Modernization Fund set up in 1986 with a corpus of Rs. 750 crores has received an over whelming response from the mills. b) The government has evolved a turnaround strategy for the sick mills of NTC, which includes providing working capital finance to tide over the liquidity problems, capacity modernization and shading of surplus labour, through a voluntary retirement scheme. The Government has established recently the National Renewal Fund (NRF) to handle the voluntary retirement scheme. c) The government of India is fully aware that, in the context of progressive globalization, the Indian textile industry should improve product quality and cost efficiency. To this end, the government has taken two major initiatives, viz, the establishment of Cotton Technology Mission (CTM) and Technology Upgradation Fund (TUF). Cotton Technology Mission will aim at improving productivity and utility of cotton and Technology Upgradation Fund will address the problems of technology obsolescence, especially in the weaving and processing sectors. 59

12. SUMMARY The textile industry in India is one of the few industries, which has the potential to emerge as a true global player. The Government has already embarked on a role of industry friendly pro-active facilitator recognizing the fact that industry needs a concerted strategy and time bound action plan to convert its core competence in availability of all major raw materials skilled manpower managerial competence and entrepreneurial skill to a competitive strength as a producer and supplier of top quality textile at competitive price while protecting its domestic turf the Government has initiated the policy measures as outlined above. With the growing awareness in the industry of its strengths and weaknesses and the need for exploiting the threats coupled with the Governments catalytic role the Indian textile industry has the potential to scale new heights in the globalized economy. Cotton textile industry is one of the well organized oldest and most firmly established major industries in India. At the end of March 2002 there were 1846 mills in the country (1565 spinning mills and 281 composite mills) with 28 million spindles and 1.6 lakh looms. Some 113 mills closed were during by the last three years. The Indian textile industry is predominantly cotton based with 65 percent of the fabric production in the country being accounted for by 60

cotton. Production of raw cotton varies from year to year depending upon rainfall and weather conditions. The price fluctuations in raw cotton affect the industry. Production of yam is almost entirely in the organized sector and it has been showing a steady increase from 1600 million kg in 1988-89 to over 2,980 million kg in 1997-98. The fabric production has also recorded an increasing trend over the years, from 20,600 million meters in 1989-90 to 36,700 million meters in 1996-97. In the production of fabrics the decentralized accounts for 95 percent and the mill sector accounts for 5 percent only. The Indian textile industry also contributes significantly to the world textile production capacity and availability of textile fibers or yams. This industry contributes about 21 percent to the world spindlesage and 6 percent to the world rotorage with China dismantling of 10 million spindles India has emerged as a country with highest spindlesage in the world. With almost 5.64 looms (including 3.89 million handlooms), this industry has also the highest loomage (including handlooms) in the world and contributes about 57 percent to the world loomage. Even excluding handlooms this industry contributes 33 percent to the world loomage. The cotton textile industry in India is the largest single organized industry in die country that directly employs about 12 lakh persons. The 61

number of handlooms in the country has gradually gone up from about 28 lakhs in 1951 to about 38.91 lakhs in 2001-2002. The production of the cotton cloth by the handloom sector has increased from a level of about 1240 million meters in 1951 to 8049 million meters in 2001-2002. The handloom also fabrics but no reliable figures of these are available. The terms of the growth of spinning mills along with the spindles and the looms capacity. As stated in table number 2.1 the no of spinning mills has increased almost four times from 107 in 1951 to 415 in 1981. Further it has reached to 1565 in 2001 from 777 in 1991. In terms of spindle capacity, it has increased three times i. e. from 11.25 million spindles i.e. 1951 to 35.53 in 2001. The spindle capacity of these mills showed some marginal increase from 26.67 million spindles in 1991 to 35.53 million spindles in 2001. The state of Maharashtra has the prominent textile centers such as Bombay, Solapur, Ichalkaranji Malegaon etc. The handloom sector is geographically spread over both in rural and urban areas. The performance of textile industry in Maharashtra shows slightly descending trend. Out of total cotton textile mills in India 20.16 percent (207) textile mills are developed in Maharashtra. The average annual production of spun yam was 361791 Thousand-kg and the average annual production of fabric cloth was 614278 Thousand-sq. mtr. in 62

2000-2001, Regarding the employment the average number of persons employed in this industry was 180541 in the year 2000-2001. The Government has adopted several policy measures to improve the health of the textile industry. The examples are, Textile Modernization Fund, National Renewal Fund, Cotton Technology Mission and Technology Upgradation Fund. 63

REFERENCES 1. Indian Economy, Ruddar Datt and K.P.M. Sundharam 2002, P-645 and Report of the Compendium Textile Statistics 2001, P-27. 2. Textile Association of Solapur, Overview of the Industry P-13. 3. Indian Economy, Ruddar Datt and K.P.M. Sundharam 2002, P-645. 3. Report of the Compendium of Textile Statistics 2001, PP-1 to 2. 4. Textile Association of Solapur: Evolution of Indian Textile Industry P-195. 5. Report of the Compendium of Textile Statistics 2001, P 27 and Dr. Qamar Ahsan and S. Mukharjee, Indian Industry: A Geographical Perspective, 1998, PP - 127to 128. 6. Report of the Compendium Textile Statistics 2001, P-2. 7. Ibid pp-2 to 3. 8. Textile Association of Solapur: Evolution of Indian Textile Industry P-195. 9. Report of the Compendium Textile Statistics 2001, P-243. 10. Ibidpp 3 to 4. 64

11. Indian Economy, Ruddar Datt and K.P.M. Sundharam 2002, P-645. 12. Ibid p 645. 13. Ibid p 5 14. Report of the Compendium Textile Statistics 2001, P-6. 15. Indian Economy, Ruddar Datt and K.P.M' Sundharam 2002, P- 648. 16. Ibid, p 649. 17. Ibid, p 651. 65