By the end of March 2000, cumulative total of closed spinning mills had reached 240 and the number of paralysed composite units stood at 109.The social impact of such large scale closure of mills has been serious. In the last two years alone, additional 74,000 mills workers have been thrown out of their jobs, mostly without any compensation.

Assuming that each such mill-hand may have on an average about four persons dependent on him, the number of unfortunate people hit, by mill closures in the last two years may well be around 3.70 lakh.Though the Union government has announced that it would create every year one crore new jobs, these idle mill workers remain without jobs.

They are denied in most cases even social benefits.Sources argue that when the going was good, most mill managements ignored the need for continuous modernisation of their units, with the result that many mills today have outdated equipment. Had the government evolved some well conceived schemes earlier, such closures and consequent social misery could have been minimised, if not avoided. Of course, the textile ministry has introduced about a year ago its technological upgradation fund scheme (TUF), but response to it from the organised mill sector remains poor as the scheme bristles with some difficult conditions.

Financial institutions which are to provide funds for modernisation do not seem to be eager to implement the scheme with requisite earnestness. There is no stipulation that these institutions will necessarily advance certain amount under the scheme every year, during its continuance. Even if the TUF fails in achieving its objective, institutions do not seem to be much concerned. Under the situation, there is hardly any significant progress of the scheme so far as technological upgradation of textile mills in the organised sector is concerned.

Recently Texprocil's chairman DS Alva has, while speaking at the council's export awards function, pointed out that "the TUF has not really taken off as expected." Though exports of textiles from India in 1999-2000 improved to $3.6 billion from $3.4 billion in the preceding year, those of cotton fabrics have remained stagnant.

Indian exports of fabrics suffer both from quality and service. When the present tariff barriers go, even in the domestic market our textile products may face an equally difficult situation. To avoid such possible competition from imports, the government may be pressurised to raise tariff barriers, but that may, according to sources, prove a shortsighted solution, unless modernisation of the industry is carried forward at a rapid pace. Further modifications of the TUF can not be put off any longer.

It is unfortunate that while the need of the hour is to equip the industry with the state-of-art equipment, the government continues to believe that even outdated secondhand machinery which may be upto 10 years and which has been rejected by the industry abroad for replacing the same by most modern equipment, can help in modernising our industry. This may prove a costly experiment both for the industry and the country and may pave the way for further closer of mills in the coming years.