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Handlooms and Textiles HANDLOOMS AND TEXTILES POLICY NOTE FOR THE YEAR 2005-2006 1. INTRODUCTION The Textile Industry occupies a pivotal place in the economy of Tamilnadu. Tamilnadu has played a key role towards achieving the growth of Textile Industry in India. Spinning, Handloom, Powerloom and Garment are the four pillars of the Textile Sector in the State. The objective and activities of the Department of Handlooms and Textiles is to promote the harmonious growth of Handloom, Powerloom and Textile Sectors and to work for the welfare of the handloom weavers. The Commissioner of Handlooms and Textiles is the Head of the Department who is assisted by various officers at Headquarters level and Deputy/ Assistant Director of Handlooms and Textiles at Circle level. The Commissionerate is responsible for formulating and implementing various schemes for the development of handloom industry and for the welfare of the handloom weavers. While the Commissioner of Handlooms and Textiles is managing the affairs at the Commissionerate level, the Deputy / Assistant Directors of Handlooms and Textiles at various circles are instrumental in executing the policies of the Government and ensuring the implementation of the scheme aimed at reaching the weavers in a most effective manner. The Commissioner of Handlooms and Textiles is the functional Registrar for the primary weavers co-operative societies throughout the State and other co-operative institutions connected with the industry, vested with the powers delegated by the Tamilnadu Co-operative Societies Act and Rules. The Commissioner of Handlooms and Textiles is the "State Textile Authority" in respect of the State of Tamilnadu and authority for the implementation of Textile (Development and Regulation) Order, 1993. The Commissioner of Handlooms and Textiles has the administrative control over 1247 handloom weavers co-operative societies, 132 powerloom weavers co-operative societies, 18 co- operative spinning mills and Apex Institutions viz. Tamilnadu Handloom Weavers Co-operative Society (Co-optex), Tamilnadu Co-operative Textile Processing Mills and Tamilnadu Co-operative Spinning Mills Federation (TANSPIN), apart from other related public sector undertakings such as Tamilnadu Zari Limited, Tamilnadu Handloom Development Corporation Limited and Tamilnadu Textile Corporation Limited in Tamilnadu. 2. PRESENT STATUS OF VARIOUS SECTORS OF THE TEXTILE INDUSTRY (a) HANDLOOM SECTOR Handloom Industry in India is the most important, ancient, traditional cottage industry which is providing employment to large number of people in rural areas and semi-urban areas. Handloom industry in Tamilnadu plays an important role in improving economic conditions of the rural poor by providing employment for more than 4.29 lakh weaver households and about 11.64 lakh weavers. In Tamilnadu, 2.11 lakh handlooms are functioning in 1247 handloom weavers co-operative societies as on 28.02.2005 and the remaining looms are outside the co-operative fold. Out of 1247 handloom weavers co-operative societies, 1169 are cotton weavers co-operative societies and the remaining 78 are silk weavers co-operative societies. The handloom weavers co-operative societies mostly exist in Rural and Semi-Urban areas, where there is large concentration of handloom weavers. All the Development and welfare schemes implemented by the Government of Tamilnadu and Government of India are channalised through the weavers co-operative societies. The handloom weavers co-operative societies have produced 1083.26 lakh metres of Handloom cloth valued at Rs.559.72 crore and sold handloom goods to the extent of Rs.696.58 crore 1 during the year 2004-05 (upto 28.02.2005). There is an increase of sale of handloom cloth worth Rs.121.97 crore in 2004-05(upto 28.02.2005) over the sales made during the year 2003-04. The number of handloom weavers co-operative societies working on profit has been increased from 527 during the year 2003-2004 to 601 during the year 2004-2005(upto 28.02.2005). Marketing is the major factor for the performance of the handloom weavers co-operative societies. To capture the consumer market, production of marketable / exportable varieties have been encouraged by the Department and suitable action plan have been given to the handloom weavers co-operative societies depending upon the market trend, so as to increase the sales. It has been programmed to adopt new marketing strategies by infusing more number of designs during the year 2005-06, so as to improve the sale of handloom fabrics. (b) POWERLOOM SECTOR The Powerloom Industry in Tamilnadu has been playing a pivotal role in meeting the clothing needs of the people. The powerloom industry produces a wide variety of cloth, both grey as well as processed. Production of cloth as well as generation of employment has been rapidly increasing in this sector. It also contributes significantly in the export earnings of the country. The Tamilnadu accounts for one fourth of the powerlooms in the country. Against 16.66 lakh powerlooms in India, Tamilnadu has nearly 4.00 lakh powerlooms of which 3.20 lakh are registered. This includes the 132 powerloom weavers co-operative societies functioning with 28,376 powerlooms. The powerloom weavers co-operative societies mainly produce the cloth required under the scheme of free supply of uniforms to school children and free distribution of sarees and dhoties scheme. During the year 2004-05 (upto 28.02.2005), the powerloom weavers co-operative societies have produced 1037.20 lakh metres of cloth valued at Rs.166.43 crore. With a view to provide continuous employment to the powerloom weavers, it has been programmed to produce marketable varieties in the powerloom weavers co-operative societies and suitable action plan has been given to the powerloom weavers co-operative societies. (c) TEXTILE SECTOR (i) Textile Mills The Textile Mills are the back bone of Tamilnadu's industrial development. It is predominantly managed by the private sector and is cotton oriented. The State Textile Industry has a significant presence in the national economy also. The Textile Industry has a very important role to play in the industrial field, with regard to employment potential, overall economic and commercial activities. This industry enables the Central and State Government to earn substantial revenue besides foreign exchange through exports. Out of 2939 large, medium and small spinning mills in India, 1729 are located in Tamilnadu, which includes 18 Co-operative Spinning Mills, 13 National Textile Corporation Mills and 20 Composite Mills. The Spinning capacity of the State is 15.66 million spindles with a labour force of about 2.21 lakh. The State produces about 1164.80 million Kgs. of Spun yarn per annum which accounts for 38% of the National figure. The State is the No.1 producer of cotton, spun and non-cotton yarn in the Country. In order to compete in the global market and to adopt State of the art of technology on par with international standards, interest subsidy at 5% is being provided to the Textile sector under Technology Upgradation Fund Scheme. So far 559 projects worth Rs.2486.72 crore have been accepted and sanctioned loan for Rs.1531.94 crore, against which Rs.1276.48 crore have been released. In the quota free regime commencing from 01.01.2005, the Textile Industry may face stiff competition from more competitive countries. The problems being confronted by the Textile Industry include high cotton and power cost, rigidity in the existing labour laws, existence of unviable units with obsolete and old machineries and WTO impact. However, Government is actively engaged in devising suitable measures to facilitate the Textile Industry to survive in the present scenario. Apart from this, setting up of Task Force to study 2 the requirements and to do the needful to encourage the textile sector is also under consideration of the Government. The Task Force will take care of the overall activities of the Textile Industry. (ii) Co-operative Spinning Mills In Tamilnadu, 18 Co-operative Spinning Mills have been setup from 1958 to 1985 with 4.70 lakh spindle capacity, so as to ensure uninterrupted supply of quality hank yarn at concessional rate to handloom weavers and cone yarn to the powerloom weavers co-operative societies and also to provide employment to the members of the weavers families and members of repatriates, Adi- dravidas and working class of rural masses. The performance of the co-operative spinning mills dwindled over a period of years. The prime reasons for sickness are due to liberalized economic policies, adverse market condition, hike in cotton price, obsolete machinery conditions, excess yarn production, inadequate working capital, new textile policy and W.T.O. impact, etc. These major factors affected the profitability gravely. All the 18 co-operative spinning mills put together have a total accumulated loss of Rs.477.33 crore as on 28.02.2005. Out of 18 co-operative spinning mills, 13 co-operative spinning mills are non-functional mills and the remaining 5 co-operative spinning mills are functioning now. The reasons for the sickness of the co-operative spinning mills were discussed during the Cabinet Committee Meeting on Disinvestment held on 31.12.2002. Based on the discussions held in the above Committee meeting, Voluntary Retirement Scheme has been implemented in all the 18 co-operative spinning mills which were working at loss. Accordingly, 8543 workers / staff were relieved on Voluntary Retirement Scheme with terminal benefits amounting to Rs.92.87 crore. At present, 5 co-operative spinning mills (Anna, Bharathy, Pudukkottai, Kanyakumari and Dharmapuri) are working continuously. Steps are being taken to get funds from National Co-operative Development Corporation (NCDC) and other sources to run the above five co-operative spinning mills with limited infusion of funds for modernisation, so as to meet the hank yarn requirement of handloom weavers. (d) GARMENTS AND HOSIERY SECTOR Garments occupy a predominant position in world trade as it is the fastest growing sector in the textile industry.
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