The Southern India Mills Association has asked the Government to roll back the diesel price hike in the interests of over 91 million people jobs in the textile industry. The diesel price hike of Rs 11 litre including all levies for bulk purchase would have an implication of Rs 4 per kg in the cost of production.
S Dinakaran, chairman, The Southern India Mills Association said that the Indian textile industry, the single largest employment provider, employing over 91 million people particularly the rural masses and women and the backbone of country's economy has been passing through a worst crisis in its history during last two years owing to high volatility in the raw material prices.
Tamil Nadu is the worst affected State which accounts for over one third of the textile business in the country, directly employing over 50 lakh people, fetching over Rs 50,000 crores forex earnings and accounting for 47.5% of the yarn production capacity of the country due to added problems like acute power shortage for past four years and high transportation cost.
The State has to procure over 95% of its raw material particularly cotton from States like Gujarat and Maharashtra by spending around Rs 5 per kg as the lorry freight and again spend the same amount to sell its produce in the upcountry particularly the power loom centres in Maharashtra.
The diesel price hike of Rs 9.25 per litre for bulk purchase at one stroke for the industry has come as a rude shock to the textile industry. Though the price is increased by Rs 9.25 per litre, the net impact of the increase at the consuming point would work out to Rs 11.00 per litre. He has stated that Tamil Nadu textile industry is facing over 60% power shortage and industry is relying only on diesel power generation.
He has said that the investment in the textile industry has become dormant during the last three years and over 20 lakh people employed in the textile industry already lost their jobs owing to power shortage.
“The diesel price hike of Rs 11 litre including all levies for bulk purchase would have an implication of Rs 4 per kg in the cost of production of 40s count yarn for the spinning sector with diesel power generation apart from substantial increase in the indirect costs like transportation and the costs of all inputs and these cost escalation would have severe cascading effect down the value chain in the textile industry”.
India is already in a disadvantage position in the international textile market due to high cost of inputs which is to the tune of 20% when compared to countries like Bangladesh as per a study conducted by the industry associations.
