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How prepared is the industry for 2005?

Additional investments. Bank assistance up to Rs 60,000 crore. New jobs to 1.5 lakh people. Enormous increase in the inflow of foreign exchange because exports slated to double in two years. These are some of the major plus points the textile minister highlighted recently to encourage the industry on the eve of its entering the quota-less regime. He also told the industrialists that they need not worry about China immediately because the industry there would need at least two years before it could reach an even plane in the global market whereas India is right now ready to face the challenge. This arises from the recognition that the importers have attached to the products from India which are regarded as superior in quality and durability. But, he has added a rider. All these will hold good if and only the industrialists here will able to sustain the global quality standards. But, quality can be reached only with technological upgradation and it is in this context that the minister regretted that the Technological Upgradation Fund (TUF) floated at a whopping Rs 25,000 crore has not been properly utilised.

He said that the government would consider the demand for opening up the project to make it eligible for smaller units so that more units could benefit. If these units upgrade their technology, they would also produce global quality products. Still, the industry has its own reservations. The processing units in particular have their own grievance on the pollution front. They are asked to follow the norm of zero-discharge so that they would not discharge their wastes into the streams or otherwise in the environment. The pollution control authorities would not issue a ‘No Objection Certificate’ unless this is followed. But, the units contend that the only way to get over this is to install reverse osmosis projects. But, the cost of installation of such a project is said to be prohibitively exorbitant for the medium and smaller units. Some of them are prepared to shut their operations than to go in for huge investments on such projects which do not directly augment their business. This has impacted the TUF scheme. Any stagnancy in upgradation means a stagnancy in technology employed. This will not help the industry rise up to the challenges posed by the international players in the post-quota regime. All the same, a blanket exemption of some units from the pollution control norms could defeat the very purpose of the pollution control schemes. This would kill the concept of juxtaposing economic growth with environmental and ecological balance. That’s why a concerted action by all the players including the government is required to sort out these issues. A mere extension of the TUF for smaller units cannot help increase utilisation of the fund. A thorough look at the rules governing the scheme and the way to get over the restrictions is important. All the same, the quality considerations are also facing tougher challenges these days. Many exporters contend that their buyers are coming out with newer and newer quality standards which force them to go for modernised testing methodologies. In the past, the buyers were content with testing the durability in terms of shrinkage and the fastness of the colour. Now, they ask for tests like saliva fastness, dry cleaning, light fastness, perspiration, inflammability, filling and twisting. There are many importers who would like a guarantee that the material would be fast enough for 10 washes. What’s more important is that all over the globe, there are manufacturers who are promising these benefits to their products. So, the importers are learning a lot to demand and are not prepared to compromise on quality lower than these exacting standards. In some cases, the manufacturers are seen to be vying with one another for highlighting these qualities as the plus points of their products. Some of the existing profiles do not augur well for the industry. For instance, even as the manufacturers spend nearly half their input cost on the yarn, a survey reveals that only 20 per cent of them do the real global test for the quality of yarns they use in their mills. The information on sampling importance is also lacking. r

- P S Sundar