Nearly 500 ginning mills in the district have downed shutters mainly due to erratic power supply and surcharges imposed with retrospective effect from 2008-09, cess on cotton seed being paid by them instead of buyers, a steep hike in municipal taxes, and difficulties in having insurance claims settled.

As a result, an estimated 80,000 workers have been rendered jobless but the government has so far not come forward to facilitate smooth conduct of spinning and ginning businesses, according to A.P. Spinning Mills’ Association president Gorantla Punnaiah Chowdary.

Addressing a press conference here on Thursday, Mr. Chowdary said the 1 per cent cess on cotton being paid by the ginning mills was a big problem as they were not supposed to pay it in the first place. There were rules that the cess has to be paid by buyers like oil mills or traders but the ginning mills were being forced to bear the burden.

The cess is being paid by buyers in Adilabad and Warangal markets whereas in Guntur the Marketing Department is insisting that the ginning mills should shell down the amount.

Lot of conditions

Another irritant in ginning business which is present only in Guntur district is the condition that ‘police certificates’ should be produced in the case of fire accidents for getting insurance claims settled. Even the Fire Department sets a whole lot of conditions to extract their share of the pie.

The Cotton Corporation of India has only promised to purchase cotton at the Minimum Support Price of Rs. 3,900 per quintal but no one knows from whom it is actually buying and at what rates. Farmers have lost at least four quintals per acre during the cyclone Nilam. The magnitude of this loss is huge but no significant help has come from the CCI or any other department concerned.

The surcharges on electricity collected at the rate of Rs. 1.32 per unit are a major drain on the finances of ginning mills. They are also hard-pressed to pay municipal taxes which have been increased manifold.


Ginning industry plunges into crisisNovember 8, 2012

More In: Vijayawada