Question

problems faced by textile industries?
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Answer 1

Following are some of the problems faced by the industry.

(a) Shortage of raw materials-Raw material determines 35 % of the total production cost. The country is short of cotton, particularly long- staple cotton which is imported from Pakistan, Kenya, Uganda, Sudan, Egypt, Tanzania, U.S.A. and Peru. It is pity that despite largest area under cotton (26 % of the world acreage) the country accounts for only 9 percent of the world output of cotton. Fluctuating prices and uncertainties in the availability of raw material cause low production and sickness to the mills.

(b) Obsolete machinery-In India most of the cotton textile mills are working with old and obso­lete machinery. According to one estimate in India over 60 % of the spindles are more than 25 years old. The automatic looms account for only 18 % of the total number of looms in the country against the world average of 62 % and 100 % in the United States. Obsolete machinery leads to low output and poor quality of goods as a result of which Indian textile goods are not able to face competition in the international market.

(c) Power shortage-Textile mills are facing acute shortage of power. Supplies of coal are diffi­cult to obtain and frequent cuts in electricity and load shedding affect the industry badly. This leads to loss of man hours, low production and loss in the mills.

(d) Low productivity of labour- On an average, an Indian factory worker only handles 380 spindles and 2 looms as compared to 1,500-2,000 spindles and 30 looms in Japan. If the productivity of an American worker is taken as 100, the corresponding figure for U.K. is 51 and for India only 13. Also, industrial relations are not very good in the country. Strikes, layoffs, retrenchments are the common features of many cotton mills in the country.

(e) Competition in foreign market-The Indian cotton textile goods is facing stiff competition in foreign markets from Taiwan, South Korea and Japan whose goods are cheaper and better in quality. It is really paradoxical that in a country where wages are low and cotton is internally available, production costs should be so high.

(f) Government controls and heavy excise du­ties-the cotton textile industry has greatly suffered due to wrong and faulty policies of the Government. In the past, the Government has sought control of price, distribution of yarn, the pattern of production, etc.

The high import duty on imported cotton, an upward revision of the price of the indigenous cotton and heavy excise duty on cotton cloths are other detrimental factors. Another prob­lem of the mill sector is related to the production of controlled cloths wherein mills are incurring huge loss.

The cotton textile industry of the country is thus facing both short-term and long-term problems. Former includes problems of high prices, shortage of raw materials, liquidity problems due to poor sales and accumulation of huge stocks due to poor demand in the market. The long-term problems of the industry include the slow pace of modernisation, outdated technology resulting in low productivity, the high cost of production, low profitability and in­creasing sickness of mills.

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