COIMBATORE: The South India Cotton Association has sought a “modular transportation system” to make cotton transport cost effective and reduce contamination.
Speaking at the annual general meeting of the association here recently, its president, C. Soundar Raj, said cotton transport was now through various modes, including bullock carts and tractors. “There is an urgent need for storage facilities at various stages for seed cotton as well as lint cotton.”
Mr. Soundar Raj said the cost of cotton transport from a ginnery in Gujarat to Coimbatore was nearly Rs. 67,500 (for 150 bales) whereas it would cost just about Rs. 10,000 to transport the same quantity to an export destination such as China or Indonesia from an Indian port. The Union Ministry of Textiles should discuss the issue with the Transportation Ministry and arrive at a “hybrid transportation concept” involving the vast network of rail, road and water ways. Cotton should be treated as a priority commodity and charged less. “This calls for urgent consideration as a way to reduce the cost of input and help in meeting the firming of rupee.”
Further, cotton now attracted 3 per cent Central Sales Tax for interstate movement. A huge volume of cotton moved from one State to another and was subjected to the 3 per cent tax. The yarn produced was again moved from the spinning mills to the weaving centres in other States. “It will be a great relief if the Textile Ministry proposes to the Finance Ministry to treat the interstate sales tax collected on cotton as vattable,” he said. This would not result in any loss of revenue but would help the industry integrate into the VAT regime seamlessly.
The Cotton Advisory Board had estimated the Indian cotton crop for 2006-2007 as 280 lakh bales and for the current year, the trade estimated the crop to be nearly 315 lakh bales. Exports during 2006-2007 were placed at 55 lakh bales and this year it could be at least 10 lakh bales more.
In such a scenario, modernisation of the ginning units needed focus. “Special efforts suited to the local conditons are needed,” Mr. Soundar Raj said.
Though the volume of Indian cotton exports was going up, it was traded with discount compared to similar varieties from the U.S. or Australia. “This is because of the absence of defined grading practices, presence of contaminants, non-standard packing of bales, etc.”