As has been in the past the working for these mills has been uneconomic and the recently announced Textiles Upgradation Fund (TUF) too would not be able to help revive their activities.

Textile industry circles fear that some more mills are expected to be closed down in the coming months as the present working conditions are not economically satisfactory and different government departments seem to be working at cross-purposes.

While the union textile ministry wants the mills to modernise themselves so as to improve their efficiency and quality by making additional investments with the help of borrowings from TUF, the union finance ministry is more concerned about extracting more revenue from the industry, even if this may eventually lead to closure of more textile units.

In theearlier month, as many as seven spinning mills had reopened and the number of paralysed composite units had remained unchanged. Their reopening prompted some crystal-gazers to predict recovery for the textiles industry. They supported their contention by referring to some improvement in the shipments of cotton yarn from the country in December 1998.

These hasty forecasts have, however, gone awry, since 10 more spinning mills have been reported closed down in January 1999, against the reopening of seven in December 1998. This showed that there was no trend indicating possibility of more such reopenings.

Further, shipments of cotton yarn has also slumped in February 1999 after marginal increase in the earlier two months. Seasoned exporters did not attach much importance to the rise in shipments in December 1998 and January 1999. They argued that it might well be due to availability of more shipping space during that particular period.

According to yarn exporters, shipments of cotton yarn in February fellto 38.98 million kg compared with 43.84 million kg in December '98 and 42.28 million kg in January '99. The overseas markets for cotton yarn continues to remain far from attractive.

The union budget had hiked the incidence of excise on cotton yarn from 5.57 per cent to 9.20 per cent though the decentralised sector can ill-afford the resultant higher prices. The budget had also denied any concession in excise duty on fabrics for masses valued up to Rs 30 per metre.

The Budget has even failed to resolve the problem of discrimination in duty payable by independent processors and by composite mills having their own processing facilities. This has greatly dismayed the textile industry.

What the industry finds more worrying is the fact that the demand for fabrics remains weak with the result that it is difficult for it to readjust prices. A number of textile mills are said to have incurred substantial losses or have suffered sharp decline in their margins in 1998-99. It may be difficult for them to remain inoperation,unless the export markets improve.

It might be interesting to note that during the first 10 months of 1998-99 as many as 67 spinning mills and 11 composite units have closed down, throwing nearly 43,000 more mill-hands out of jobs. This takes the overall jobless mill-workers' number in the country to 3.07 lakh. When people are getting unemployed they can not be expected to buy more of textile products.