All spinning mills should be made to declare their stock, says CM in his letter
All spinning mills should be made to declare their stock, says CM in his letter
With cotton and yarn prices rising, affecting the textile industry in Tamil Nadu, Chief Minister MK Stalin has sought Prime Minister Narendra Modi’s intervention to improve the situation.
In his letter to the Prime Minister, Mr Stalin said that as an immediate measure, declaration of cotton and yarn stock may be made mandatory for all spinning mills, so that guineas and cotton traders can get real data on their availability.
Though the central government had waived import duty on cotton till September 30 this year, it will take more than three months for the consignments to reach Indian ports after the signing of the contract. Effectively, the import duty waiver would be available only till June 30, he said.
“Therefore, the Central Government may issue suitable clarifications that exemption of import duty shall be available for all contracts entered into by 30th September,” requested Mr. Stalin. The cash credit limit of spinning mills for buying cotton can be increased to eight months in a year.
“At present, banks provide cash credit limit to spinning mills for purchase of cotton for only three months, whereas farmers have the availability of cotton for four months and after that, it is available in the market for four months. is,” he said. Told.
Similarly, margin money on 25% of the purchase price by banks can be reduced to 10% as banks were calculating the purchase stock price at rates lower than the actual purchase/market rates, Mr Stalin said.
The Chief Minister also recalled the issues facing the textile industry along with Union Finance Minister Nirmala Sitharaman and Union Textiles Minister Piyush Goyal. He acknowledged that the central government took note of the situation and the request of the state and informed the withdrawal of the import duty imposed on cotton.
“Despite this, the situation has not improved and cotton and yarn prices continue to rise. This precarious situation has cascading implications for the textile industry in Tamil Nadu. A large number of spinning, weaving and garment units are facing the threat of closure. Price mismatch between the constant demand on their working capital and the agreed price supplied to the buyer with the cost of production,” he argued.
Apparel manufacturers were suffering huge losses and many MSME units had already closed their operations. This has resulted in massive job losses in a sector that has traditionally been employment-generating, Mr. Stalin said.
“The situation has also been adversely affected by the handloom weavers in the cooperative sector as they are not able to procure yarn and supply it to their members for weaving cloth. The growing dissatisfaction in the industry and among the weavers is worrying,” the Chief Minister said. he said.