On the other hand, fabric production in Pakistan, India's competitor in the world market for yarn and fabric, has gone up in the same period of time. Yarn production in Pakistan, however, has shown a downward trend.

The fabric production index of India which stood at 72.8 in the first quarter of 1996 has gone down to 67.7 in the last quarter of 1998. Conversely, the index of yarn production which stood at 139.8 in the first quarter of 1996 went up to touch 152 in the last quarter of 1998.

The index of fabric production in Pakistan which stood higher than India even in 1996, has gone up further to touch 122.3 in the last quarter of 1998. The index stood at110.1 in 1996.

Pakistan's achievement on the fabric front becomes more significant given the fact that its yarn production has shown a downward trend. Yarn production index for the country in 1996 was lower than that of India at 133.9 and it went down further in 1998 to reach 124.

KJS Ahluwalia, executive secretary, Northern India Textile Mills Association, says that a question which policy makers should ask themselves is why there is illness in fabric production when yarn production is quite satisfactory despite being under stress.

According to Ahluwalia, fabric production is loaded with extra burdens so far as composite mills are concerned and it directly affects total production as these mills give better quality products and engage in exports. "The big and medium mills are facing unequal playing field vis-a-vis unorganised sector. The large sector has to bear the brunt of concessions and exemptions to SSI units which do not stand economic logic."

Ahluwalia says that in Pakistan all units aretreated alike and are therefore able to progress faster than India. "Both India and Pakistan sell their products in the same markets. Because of the discrimination that big mills have to suffer in India, Pakistan's products are gradually becoming more competitive and the data shows it."

The government needs to reframe its policies keeping the welfare of the whole textile sector in mind if it wants things to improve, says Ahluwalia.