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Hike
in duty
The
government’s recent decision to hike the import duty on raw
cotton to 10 per cent from 5 per cent appears to be a short-sighted
one, particularly in the current situation when the industry is
passing through a difficult phase on more than one front. This kind
of move certainly does not hold much of ground at a time when we
are entering into an open regime. The decision seems to be influenced
by the fact that the price disparity between the domestic and international
prices would lead to flooding of imported cotton in the country.
There was a time when international prices had fallen to as low
as 35 cents from 52 cents and as against this the domestic prices
were ruling quite high. The difference for a candy was as high as
15 per cent. But the situation currently is different. The present
disparity is not good enough to make any commercial sense. Most
of the imports taking place today, are need-based in order to meet
specific requirements of mills. Moreover, the mills which require
quality cotton for specific purposes will still continue to opt
for imported cotton. And any increase in import duty will only add
to the input cost of mills which are fighting their last battle
to keep themselves afloat. Ironically, on one hand, the government
is trying to modernise the industry to reduce the cost of production
for quality products, on the other there has been moves like this
to enhance the cost of production. It is high time that the authorities
desist from doing such an act that serve no purpose in the longer
run. If at all the government is justifying its stand by saying
that it is intending to protect the larger interest of country’s
farmers, it should keep in mind that there are plenty of other measures
to make the cotton cultivation more competitive. Towards this end,
the government should put in place a mechanism which can enable
the farmers to adopt newer technologies at a much faster pace than
things are moving at present.
Today, there is a big gap between the technology available and the
technology being used by the farmers. There is dire need to strengthen
the existing extension system. In this regard, technology like genetically-modified
cotton should be allowed at the earliest. Already, there has been
delay in approving the commercial cultivation of Bt cotton. The
proven technology will not only increase the production, but will
also reduce the cost of production. In short, this will make the
Indian cotton competitive in the global market. The moot point is
that we have to make our cotton strong enough to face the global
challenge. Or else imports will keep on growing as against stagnant
exports. The government should implement the TMC with true spirit.
As it is so far things have moved at leisurely pace. In the current
condition, there is no place for complacency.
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