Union Textile Minister Dayanidhi Maran’s new moves on cotton supply policy will save the national exchequer Rs. 800 crore and the textile industry Rs. 100 crore, besides restoring the industry’s competitiveness, according to South India Mills Association past-chairman Manikam Ramaswami.
Mr. Ramaswami said in a statement: “Mr. Maran had acted in the interest of the nation and set right several distorted policies that were initiated during the previous years and were costing the country dear. The policy of giving incentives for raw cotton exports, that too with retrospective effect, which benefited only traders, cost the exchequer Rs. 600 crore and made Indian cotton that much cheaper that that of competing nations like China and Bangladesh.
Curiously, the top-ten cotton exporters who account for 70 per cent of cotton exports have sold their Exim scripts at prices far below market prices to a few Exim script dealers.
“The policy of the CCI (Cotton Corporation of India) selling its cotton with high discounts and long interest-free periods to large trader-exporters and a handful of large mills at the cost of thousands of small mills too is going to be stopped, as directed by the minister. This bulk discount and interest-free carrying facility cost the CCI (which is subsidised by the Government to do the support price activities) close to Rs. 200 crore. “The Minister has also instructed CCI to do bulk transportation of cotton from Gujarat to Tamil Nadu using Railways and coastal shipping to reduce the cost of transportation. This will save the nation over Rs. 800 crore which actually went to reduce the cost of raw materials of the competing nations like Bangladesh and China besides saving Rs. 100 crore in logistics cost of cotton transportation to Tamil Nadu mills.”