Fresh Ntc Revival Package Finalised

The government has finalised a new revival package for the National Textile Corporation (NTC) mills, Union textile minister R L Jalappa said at a press conference here yesterday.

The minister also said that the Board for Industrial and Financial Reconstruction (BIFR) has been asked not to proceed with the winding up notice for four of the NTC mills.

The government has invited the Maharashtra Chief Minister Manohar Joshi to Delhi to discuss the new revival plan as the majority of the NTC mills are located in the state.

Jalappa, however, refused to divulge the details of the new plan as it is yet to be put before the Union cabinet.

Textile exports for the year 1996-97 had exceeded the target of $9.9 billion, the minister said. Export figures are close to $10 billion till now, he added. The growth rate has been 10.4 per cent in dollar terms and 17 per cent in rupee terms. Target achievement has been very high in the case of cotton yarn (120 per cent), wool (133 per cent), cotton fabrics (105 per cent) and readymade garments (100 per cent).

The minister said that in 1996-97, a quota of 12.91 lakh bales and cotton was released. Of this, 5.23 lakh bales were shipped out on April 23 this year. A spill-over of 6.9 lakh bales of cotton have been permitted up to the end of February 1997, he added.

Jalappa said that the earlier NTC revival plan, which envisaged modernisation of 79 mills at an outlay of Rs 2005.72 crore, had been dropped. The entire funding was proposed to be made out of the sale of surplus land and building available with the NTC mills. This proposal met with opposition since the Maharashtra government was unwilling to allow the use of money raised from sale of mills in Maharashtra for revival of mills located elsewhere. The note, available with Business Standard, includes a radical proposal of the finance ministry to shut 107 out of a total of 120 mills belonging to NTC without an enhanced voluntary retirement scheme (VRS) package.

The note also includes recommendations of a sub-committee appointed by the government which has sought closure of only 70 mills and that of the textile ministry which wants enhanced compensation package for the mills workers under a new VRS but without the closure of the mills.

The finance ministrys note is based on the recommendations of the sub-committee.

The ministry has argued that only 13 mills can be revived as they involve a small investment of about Rs 125 crore excluding wages. It has pointed out that further investment in the revival of the sick mills would be futile as such attempts earlier have failed to turnaround the NTC. The sub-committee, in its recommendation, suggested that 70 mills with a total workforce of around 67,000 should be closed down and the remaining 50 should be revived at a cost of around Rs 1,700 crore.