TIRUVANNAMALAI: The abolition of the central value added tax (CENVAT) by the United Progressive Alliance Government soon after coming to power has led to the revival of the textile industry and reopening of several mills in India, especially in Tamil Nadu, according to Union Finance Minister P. Chidambaram.

Inaugurating the AKCT Chidambaram Cotton Mill Private Limited, established with 27,000 spindles at Mangalam about 23 km from here on Sunday, he said there was a fear that the textile industry, the first one to be started after Independence, with the objective of providing employment to the people, would decline due to the increase in the price of cotton and yarn. Several textile mills, mostly in Coimbatore district, were closed down.

While the parties in the UPA made an election promise during the 2004 Lok Sabha elections to get CENVAT abolished for power looms, the UPA Government analysed the reasons for the gloom in the industry and decided to abolish CENVAT not only for the power loom sector, but also for the entire textile industry.

The move was made to ensure that the industry continued to provide employment to lakhs of persons. Mr. Chidambaram said that the Government would not neglect agriculture, since a majority of the population depended on it, especially in the backward areas such as Tiruvannamalai district. "Textile mills cannot produce rice, wheat, sugar, vegetables and milk, vital for human sustenance. Agriculture will, therefore, continue to occupy the prime place in the priority list of the Government," he said.

Mr. Chidambaram has instructed banks to advance educational loans to all students who obtained seats in professional colleges so that the children of poor farmers, industrial workers and others could pursue higher studies. Educational loans to the tune of Rs.830 crore were given to 56,230 students in Tamil Nadu in 2005-06, he said.

The Japanese example

The Finance Minister appealed to the workers to strive for settling labour problems through negotiations. Reminding the Japanese example where the concept of strike meant increased hours of working and increased production as a way of protest by the workers, he appealed to the Indian workers to ensure that work in factories was not stopped on any account. "If there is an amicable situation, the workers will get good salary, increment, bonus and other concessions," he said.

AKCT. Chidambaram, company managing director, said the aim of his family in starting a textile unit in Mangalam was to provide employment to the people of the area. One thousand persons, mostly women, were employed in the factory, he said.

AKCT Alagappa Chettiar, chairman proposed a vote of thanks.

The mill has a capacity to produce 6 tonnes of yarn per day.

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