The Hindu Business Line : Textile machinery production up 25 pc

THE production of textile machinery, their parts and accessories went up last fiscal by 25 per cent to Rs 1,668 crore from Rs 1,341 crore in the previous fiscal.

This was due to higher investments on modernisation/re-equipment of plant and machinery in the textile manufacturing industry.

The industry also recorded its capacity utilisation at 55 per cent during the year, according to the Textile Machinery Manufacturers' Association of India (TMMAI).

But, the flip side is that of the total estimated demand of Rs 4,200 crore of the textile industry, a major share was met through imports. This has called for an urgent need on the part of both the user-textile industry and the textile engineering industry (TEI) to initiate a joint measure to reverse this trend, said the outgoing Chairman of TMMAI, Mr Sanjay Jayavartanavelu.

Speaking at the association's 45th annual general meeting recently, Mr Jayavartanavelu said the spurt in demand for textile machinery has triggered the TEI to expand production capacity to meet the rising demand, especially in the spinning machinery sector. The units in the industry were striving to step up production to shorten the delivery period.

This is despite the fact that they had to contend with longer delivery schedules from mother machinery suppliers. Notwithstanding this handicap, the TEI should endeavour to meet the demand in volume/quality and performance with effective after sales service.

The TMMAI Chairman felt changes in fiscal policy and removal of hurdles being faced by the TEI need to be effected to make the indigenous textile machinery sector gain strength and scale up its technology and export competitiveness. The areas of fiscal correction required are lowering the rate of excise duty on textile machinery from 16 per cent to the merit rate of eight per cent, continuation of the exemptions in excise duty, which should be extended to inputs needed for manufacture of specified textile machines.

The intermediate products needed in the manufacture of textile machinery as well as spares should be put at four per cent excise duty subject to actual-user condition. At the same time, the present customs duty concessions on specified machines must be removed and one common rate of import duty of 10 per cent should be levied for all textile machines.

To counter the disadvantages faced by the TEI vis-à-vis imported machinery, the customs duty rate be fixed at five per cent on all inputs (irrespective of whether they fell under chapter 84 or any other chapter of the customs tariff) in the manufacture of textile machinery as well as the spares to be supplied by the manufacturer subject to the actual user-condition.

The TMMAI Chairman also underlined the need for early creation of a Rs 2,500-crore development fund for TEI to enable the units to spend on R&D, infrastructure building, export promotion and plans on environmental protection.

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