Monday, July 11 2005 15:56 Hrs (IST) - World Time -

Bangalore: The Karnataka Textile Mills' Association (KTMA) today (July 11, 2005) warned that the proposed hike in power tariff would sound the death knell for the declining textile industry in the state, forcing many of the mills to shift base to neighbouring states like Andhra Pradesh (AP) and Maharashtra and rendering thousands of workers jobless.

"The proposal to hike the current power tariff from Rs 4.50 per unit to Rs 5.10 per unit would force many to shift mills to Andhra Pradesh, Tamil Nadu and Kerala, given the relatively lower tariffs in these neighbouring states", C Valliappa, Chairman of KTMA told reporters here.

The power tariff in Karnataka was the highest compared to AP (Rs 3.41 unit), Maharashtra (Rs 3.30 unit) and Kerala (Rs 3.20) unit, making it an 'unfair' playing field for those involved in this industry, Valliappa said.

As per the vision statement of Indian Cotton Mills' Federation, the industry was likely to generate over 12 million new jobs for the semi-skilled and un-skilled labour in the next five years and had the potential of reaching a turnover of Rs 3,74,000 crore from the existing Rs 1,54,000 crore.

The industry, which is agro-based and labour intensive, employs large number of SC/ST individuals as well as women and the underprivileged sections both in the rural and semi-urban areas. Currently, nearly 35 million people are employed in the textiles and its next only to agriculture in its employment potential, he remarked.

However, in Karnataka, unfavourable factors, including lack of incentives, concessions and Government support had resulted in the decline of spindle age from 12 lakhs in 90's to 6.5 lakhs, with the industry still limping.

The steady increase in power tariff from Rs 1.75 unit for over two lakh units in 1993 to Rs 3.45 per unit in 1996 to Rs 4.65 in 2002 and currently at Rs 4.50 had led to a lot of mills closing down since the power component in the textile manufacture comprised nearly 55 to 65 per cent of the cost.

Neighbouring Tamil Nadu, AP and Maharashtra were proving to be strong competitors in the field, according to A S Veeranna, Chairman Anjaneya Group of Industries.

The AP government had offered incentives like reimbursement of power at a rate of 75 paise per unit during the first year of the New Industrial Policy approved by the state cabinet and a promise of rate of reimbursement being regularised every year for the remaining four years.

The Maharashtra Government, on the other hand, had offered 20 per cent capital subsidy scheme to boost the industry in the state while Tamil Nadu had recently witnessed an increase in the number of mills and weaving pockets, he added.

Valliappa warned that unless some immediate measures were taken, the textile industry could grow into a sick industry forcing thousands to be unemployed with mill owners being forced to shift base. Many of the mill owners could also explore the possibility of shifting to nearby countries like Bangladesh, China, Indonesia and Sri Lanka where the tariffs were much lower compared to Karnataka.

Calling for setting up of a high-level committee for improvement in spindle age, he said efforts should be made to supply power at night at lower rates and to ensure improvement in the quality of power supply. "If not we will have to leave and go", he said sternly.