The Hindu : Business : NTC may sell 20 mills

Online edition of India's National Newspaper
Friday, May 27, 2005

Business

Business

NTC may sell 20 mills

R. Gopalakrishnan

Vaghela sees no threat from Chinese textiles

— Photo: K. V. Srinivasan

Shanker Sinh Vaghela

CHENNAI: Twenty mills belonging to the National Textile Corporation (NTC) are likely to be put on sale, while 18 other mills will be run in partnership with the private sector, according to Shanker Sinh Vaghela, Union Minister for Textiles.

The corporation will revive and operate 15 mills on its own.

These decisions, taken by a Group of Ministers recently and forwarded to the Board for Industrial and Financial Reconstruction, will bring about a radical change in the financial health of the corporation, the Minister said.

Mr. Vaghela, who was on his way to Pondicherry, where two mills of the NTC will be handed over to the government of the Union Territory, said in an interview to The Hindu on Thursday that his Ministry had decided to recommend to the Centre to allow Maharashtra to export cotton directly, in addition to exports canalised through the Cotton Corporation of India. He said the CCI had undertaken purchase of cotton on behalf of the Maharashtra government, most of whose own procurement centres had closed down.

As a result of the much higher support price offered by Maharashtra, the State government had incurred losses of Rs. 2,000 crore. Maharashtra had a surplus of 40 lakh bales of cotton, depressing the price in the domestic market.

The Minister said the country could not any more afford to ignore quality and productivity of produce and farmers should shun dependence on the government. Cotton farmers should take pains to improve quality and productivity as done by Israeli farmers. Similarly, Indian jute was not up to the mark and cultivators should try to match the fibre produced by Bangladesh.

Asked whether the slapping of quotas on Chinese garments by the U.S. afforded an opportunity for Indian exporters or a threat to Indian producers by way of possible diversion of Chinese textiles into India, Mr. Vaghela said that in the long term, India was in a much better position than China. Investors who had invested in the textile industry in China were looking towards India now, in view of the uncertainties that China faced, including possible pressure by the U.S. on Beijing on questions of human rights or labour standards. India also had the strength of entrepreneurship and traditional skills. What India lacked was economies of scale.

He denied that the law enabling women to work night shifts would lead to proliferation of sweatshops in the garments sector. "The law does not compel women to work at night. It only says that those women who want to work at night should be allowed to do so," he observed.

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