Textile mills in Tamil Nadu will get a benefit of Rs.2 to Rs.3 per kg of yarn through the Depot Sales Scheme for cotton, Union Minister for Textiles Dayanidhi Maran said here on Monday.
The Cotton Corporation of India (CCI) has set up cotton sales depots in Coimbatore and Rajapalayam to sell cotton directly to the local mills.
Speaking at the launch of the scheme, the Minister said Tamil Nadu had thousands of textile mills. Nearly 70 per cent of them were small and medium-scale units. The scheme would benefit these units.
Annual cotton production in Tamil Nadu was just about five lakh bales (85 million kg). The mills in the State consumed approximately 1,658 million kg a year and purchased cotton from Gujarat and Maharashtra, incurring high transportation cost.
The CCI had framed the scheme for areas where clusters of textile mills were located. Initially, Tamil Nadu, Punjab and Himachal Pradesh had been identified.
Cotton-producing States levied four per cent local purchase tax, which was a major obstacle to implementation of the scheme when it was proposed.
The CCI would bear the additional cost of two per cent.
The Tamil Nadu government gave four per cent Value Added Tax exemption for purchases made from the depots, which made it viable to open the depots in the State.
The mills should pass on the cost benefit they would get through the scheme to the garment sector, he said.
During this decade, the Centre had given Rs.67, 221 crore as subsidy under the Technology Upgradation Fund Scheme for textile units.
Those in Tamil Nadu received Rs.18,933 crore.
He urged the Southern India Mills’ Association to establish the processing park proposed in Cuddalore as the textile industry had revived.
He also urged the mills here to supply cotton waste to textile units in Erode region as several units were making products from it.
According to a CCI release, different varieties of cotton bales would be available for sale in the depots. The buyer mills would be able to select cotton by pre-testing the samples in laboratories.
Minister for Rural Industries and Animal Husbandry, Pongalur N. Palanisamy, urged textile entrepreneurs to modernise their units and export value-added products.
Minister for Handlooms and Textiles K.K.S.S.R. Ramachandran said textile mills provided employment to unskilled workers too.
Subhash Grover, Chairman and Managing Director of CCI, in his welcome address said Coimbatore was one of the important textile hubs in the country.
Vice-Chairman of Confederation of Indian Textile Industry S. V. Arumugam and Chairman of the Southern India Mills Association spoke.