Until last year, spinning mills in Tamilnadu were running round the clock, and were busy expanding their operational capacities. Now, with the export market hit the economic crisis, coupled with a few other factors, the declining foreign orders has pushed the textile industry of South India is centered into a crisis.
Textile mills in Coimbatore accounts for a predominant part of the industry in South India. Presently, a major part of the spinning mills which involves in manufacturing yarn remains idle. Several units and closing down, putting the jobs of thousands of the workers into jeopardy, and many others have not received their wages for months. 392 mills were closed during the previous year leaving more than 2lakh workers jobless. Saddled with recession, the industry is tumbling down facing a steep fall in the export orders, especially from the South East Asian markets. The economic liberalization, which was believed to be the pivot of Coimbatore spinning mill's success, is now being blamed as a reason for the industrial turmoil.
The corresponding period during the previous year was a busy period for the spinning mills in South India. The spindle capacity was doubled with 40% additional capacity. All these efforts have gone with the wind, with the advent of global recession and power crisis. The fiscal year 2008-09 is one of the most difficult periods in the history of textile mills in South India. Cotton yarn production is already down by 20% during the last fiscal year. Production which was 4003.44 million kg during 2007-08 dropped to 3239.17 million kg during the last year.
Mills in Andhra faced a power cut of 30%, while mills in Tamil Nadu are facing a power cut of 45%. This has literally pushed the manufacturing units in Coimbatore region to the brink. With very little electricity to run the machines, burdened with intermittent power cuts, the spinning mills operate with minimum capacity. Due to the ongoing power crisis, mills are running only on 55% of their production capacity resulting in drastic cuts in production and widespread lay-offs.
The Government's failure to take initiatives to provide relief to the industry has caused agitation among the mill owners. Despite the Government's announcement of three stimulus packages for the industry, it did not provide any succor to the ailing industry. The 5% tax incentive given to the cotton traders as a part of the stimulus package, only added to the woes of the spinning mills.
Like Scylla and Charybdis, global economic turmoil and acute power cuts are pressing down the performance of the textile units. Increasing prices of cotton and revision of minimum wages, and export sop for cotton have added fuel to the fire. Textile industry in Tamil Nadu which accounts for 45% of the countrys spinning capacity is now facing incredible pressure with initiated proactive measures proving futile. Appropriate measures must be taken, with due support from the Government to revive the industry.