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Home  » Business » Textile industry: seeking priority!

Textile industry: seeking priority!

By Arvind Singhal
May 31, 2003 17:04 IST
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Yet another ministerial reshuffle was completed last week. And yet another opportunity was lost by the ruling political leadership to demonstrate its vision or a resolve to put a priority on the economic development of the country itself.

As per media reports, the reshuffle was undertaken more for political expediency and less for punishing or rewarding performance or for a more toned-up governance as a run up to the general elections in the coming year.

It was even more surprising to read that the civil aviation or coal ministries ranked higher in the pecking order of desire compared to textile, and that the shift of the erstwhile civil aviation minister to the textile ministry was perceived as a demotion of sorts.

This mindset, if true, only reflects the lack of understanding the current and previous governments have on the economic front. For those who are not aware of the importance of this sector to India, some facts are worth repeating.

Textile is the largest industrial sector in India (and the second largest overall in terms of impact on the economy after agriculture). The total size of this sector (domestic and exports) is over Rs 1,50,000 crore (Rs 1,500 billion), i.e. almost 7 per cent of the GDP of the country.

At about $13.5 billion, it still accounts for over 25 per cent of India's exports. More importantly, almost the entire value addition in this export figure is on account of domestic inputs.

It is the largest employer in the manufacturing sector in India, and the employment is far more evenly distributed across the length and breadth of India (and more rural than urban) than any other sector.

Its fortunes have a direct impact on the agriculture sector itself due to the very crucial role of cotton cultivation for the farmers.

The likely end of MFA in December 2004 with abolition of quotas is already giving a perceptible fillip to the export potential of textile products from India.

With some more support from the government, as well as revived entrepreneurial activity, the size of the textile industry in India can be as much as $55 billion (over Rs 2,60,000 crore (Rs 2,600 billion) at current exchange rates) by the year 2010 including as much as $25 billion -- approximately Rs 1,20,000 crore (Rs 1,200 billion) -- of exports!

Other than the upcoming IT and ITES sectors, there is no other sector in India that has the potential to reach this scale by the same period.

Textile and clothing sector has the best potential in the short and medium term to generate higher levels of employment at the grass-root level adding substantial purchasing power for rural India (farmers and processors down the chain) and thereby sustain growth of many other industries.

It is, therefore, imperative that the prime minister and his key economic advisors take full cognisance of the importance of a thriving textile sector and ensure that the very best political and administrative resources are allocated to the textile ministry to ensure that this sector benefits from a conducive and forward looking policy framework.

In view of the tremendous potential of this sector for generating substantially enhanced exports for India in the very near future, the prime minister's diplomatic initiatives must also include getting better access for Indian textile products in major global markets.

Further, various chambers of commerce must take up the revival and growth of this sector as one of the higher priority items on their agenda and maintain this focus for years to come.

CII and FICCI have been putting a more visible effort in this direction in recent years but much more needs to be done.

Industry and entrepreneurs have a lot to do themselves. Textile and clothing sector has suffered from the fact that it is the oldest industrial sector in India.

Fortunes of major business houses in India have been built on textile sector but unfortunately, many of them have lost interest in making further investments in this sector.

Hopefully, the excellent financial performance in recent months of leaders such as Arvind Mills, Indo Rama and several others should lead to a revival of interest in investing in this sector.

Finally, the media has to also play a very important and responsible role in conveying this message loud and clear.

At least in my perception, the textile ministry is a very important economic ministry and hence any political or bureaucratic appointment to this ministry has to be seen as a sign of a 'promotion' and not otherwise!

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