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Mills ask govt to reform labour policy for facing global challenges

Textile mills have urged the government to take up labour law reforms on a priority basis in order to bring about required efficiency in the existing production base for facing the global competition in the post-MFA regime, reports Arbind Gupta.

Keeping the changing trade order in mind, mills have asked for formulation of a labour policy that could provide textile units the required flexibility to deal with the fluctuations arising out of the future demand-supply pattern.

Speaking to Express Textile, Mr R K Dalmia, the newly elected chairman of the Mill Owners’ Association (MOA) said, "It is high time that the government carry out the necessary amendments to the existing labour laws that have lost the relevance in the given situation. Unless the recent policy measures in terms of modernisation and investments are backed by an appropriate labour policy, they will not fetch the desired results for the domestic industry. This assumes more significance for an industry like textiles which is labour intensive in nature."

According to Mr Dalmia who is the president of Century Textiles, one of the few Mumbai-based mills that have been able to successfully face the recent challenges, labour reforms will not only provide flexibility to textile units but also go a long way in enhancing the productivity of our labour force. "I am not saying that the policy should be totally in favour of textile mills (employers), but there is certainly need for modifications that can help us in putting up an efficient facilities. There must be some provisions that could prevent employees from being exploited in certain cases. On the other hand, mills too will have to train and nurture their work force so that they can adopt to the new condition in a much smooth transition," stated the MOA chairman.

Moreover, the association has also called for improvement in infrastructure as also cost rationalisation of inputs like power, water and others. "The government has, no doubt, initiated some schemes to offer better infrastructure. But the process of implementation is still very slow due to more than one reason. Fresh investments and infrastructure both have direct co-relation and that is one of the reasons why the progress of TUF scheme has not been very satisfactory in the recent past," pointed out Mr Dalmia who is also the chairman of the Technological Institute of Textiles and Science, Bhiwani.

Commenting on the recent debt-recast package, he said that the package would give boost towards reviving more number of potentially viable units whose bottomline got affected due to high cost of debts taken in the past. Mr Dalmia urged the industry to take advantage of the recent measures initiated by the government and gear up for the post-quota contingencies.

It may be noted that the finance ministry has made certain changes in the debt-recast package as demanded by the industry. It has extended the debt limit to Rs 2 crore in the scheme to revive more number of textile units which are potentially viable. Under the revised package, the textile units which tap external commercial borrowings, will have to repay their dues within five years. However, in case of rupee loan the repayment period may be longer than five years. The implementation of the scheme will trigger off the entire modernisation process which so far has moved at a much slower pace than expected.

According to the finance ministry, financial institutions and banks can access ECBs and convert rupee loans into foreign currency loans. Moreover, the conversion of working capital term loans would be left up to the lenders to decide and the interest rate on working capital loans will be fixed in line with the guidelines of financial institutions and banks.