I would like to rectify (& apologise for) the claim in the Press release (July 2019) of Ministry of Textiles that ” no negative impact of demonetisation was observed by the ministry during its implementation of schemes/ field visits”
The timing of demonetisation DID affect the winter sales adversely in 2016. Like other industries, DeMo hit the textile industry & the damage continued. Thereafter, the introduction of GST created new problems to an already ailing textile market.
Well, what is done cannot be undone.
Inspite of India’s demographic dividend, textile industry is witnessing massive job losses. We would like to amend our policies & try to clear as many hurdles as possible, to give our textile industry, its long awaited ‘due’.
Before I propose the policy reforms, I wud like to put forth my understanding of our textile industry. Textile is no longer a commodity which the poor cannot pay. The sheer choice in terms of type, quality, quantity indicates that people can trade up & down as per their income level.
Hence, textiles is one industry which is ready to go international completely. My policy intends to make it truly international with all prices- over long term- aligned to international prices, with no subsidy element in any supply or consumer chain.
Our country has enough textile machinery firms making world class textile machinery. Spinners, weavers, composite textile mills need no subsidies. With world class & scale metro chemical plants, synthetic yarn manufacturers need no subsidies either.
It is time to dismantle all subsidies, controls, reservations, etc & free the textile industry to go global. On the basis of this critical observation & thinking, I propose the following changes, reforms in our current ailing sector
Selective taxation distorts markets and hinders exports. Hence, first & foremost, I would like to introduce a single GST rate of 12% . This rate will apply to all textile categories, right from cotton, yarn, mills, handlooms, garments, synthetic yarn, MMF, fabrics etc.
A major boost to textile industry will be possible only if single rate GST prevails. Only 1 GST rate for every fibre, every process, every garment.
Full GST will be refunded for exports which will provide an impetus to falling exports.
The newly revised single rate GST will be applicable from 1st Oct 2019.
Cotton will be priced at international rates & farmers paid accordingly. Thus the cotton prices will be adjusted so as to make no adverse impact on cotton farmers. These steps will facilitate the textile industry to produce what consumers want, in domestic markets as well as abroad.
In case of a dip in global prices (which wud be the proposed benchmark henceforth) , farmers will get the difference between the MSP and the price (international rate) realised by them. In any case, I guarantee that cotton farmers will realise the MSP.
Reconstituting of weak textile units will be given topmost priority. All the textile units who have set up plants under Technology Upgradation Fund Scheme & are marked as NPAs as on 31/3/2019 will be reconstructed. The required notification will be released soon by AltSarkar RBI governor
I propose to declare Malegaon, Bhiwandi & Ichalkaranji as “Weaving Hubs”. A weaving hub unit will qualify for TUFS on priority basis. It will get a tax exemption for a period of 3 years.
Towns(Kanchipuram,Erode, Solapur, etc) devoted to handloom & powerloom weaving, along the lines of Nagpur village near Jalalpur, will be developed across the country. Respective State Govts will be directed to provide special attention to daily supply of Power to such towns .
Embroidery designing centres for digital (IT) embroidery courses to tap skilled labour & facilitate the learning of software for introducing much needed precision, will be set up in major cities & towns.
Textile handicrafts, though a cottage industry, has been a major revenue generator. To revive handlooms to produce more intricate fabrics for the “super-rich”, measures will be taken, which will benefit the traditional weavers directly.
Suggestions from weavers to improve the indigenous weaves of India with the aim of attracting global attention, would be highly appreciated.
For vast outreach of innovative techniques, a new Govt. promoted Textiles YouTube channel will feature videos of traditional weaving styles, intricate designs, documentaries about weavers who have harnessed our rich cultural heritage.
Creators of select videos of YouTubers which will feature in our Sarkari channel, will get benefited as the exposure will pave way for more sales/ revenues.
Monetary incentives/ honorarium will be given to the artisans for sharing their knowledge.
In collaboration with the Ministry of social justice & empowerment, a database (in all regional languages) of tribal knowledge, varieties of raw materials used, development of animal husbandry, etc will be created. The uploaded content will be accessible online.
Outdated labour laws have hampered our textile sector to no end. I assure to come up with flexible & viable labour laws at the earliest.
In an attempt to boost domestic consumption & on approval of Ministry of HRD, free uniform sets, cloth schoolbags will be provided to all students attending Govt/ municipal schools. A network will be created to provide employment opportunities to the current unemployed casual workforce, by tie-ups with NGOs (if possible).
Textiles can play a vital role in the packaging industry for the gradual phasing out of plastic. A wide range of small units recycling used clothes into packaging as bags, wrapping sheets, & other items,will be set up.
We need a national textile policy document, a bold & futuristic blueprint is urgently needed to address the challenges like massive skill upgradation, meaningful export incentives, modernisation of machinery, big digital push in design & automation, etc
I would like to have consultations with struggling textile businesses to understand more, about what is preventing them from thriving. All suggestions are welcome here ,as also on email@example.com