According to sources, the remaining workers are also expected to the join the scheme soon as per an agreeement with the representative union, Textiles Labour Union (also called Majoor Mahajan) in December last year subsequently modified in June.

The MH Mills, earlier known as Bihari Mills and famous for Manhar fabrics, has been one of the few mills in the organised sector which had managed to run in profit till two years back, despite recession in the industry. A devastating fire in August last year in Unit-II had rendered the entire unit beyond repairs.

When contacted, the company's chairman Deepak Navnitlal Parikh said, "We are not forcing any worker to accept VRS despite an agreement with the union (Textiles Labour Association, also known as Majoor Mahajan Sangh). We have decided to paythe dues to worker totalling about Rs 7 crores from the sales proceeds of the assets (whatever remains of the building and machinery)."

"We have also simultaneously undertaken the modernisation of Unit-I at a cost of Rs 40 crores. This included Rs 25 crores for the state-of-the-art machinery on loans from ICICI, SBI and BoB, and another Rs 14 crores for a 4.1 mw captive power plant on loans from IDBI and other financial institutions (FIs)."

Before the fire, he said, Unit-I produced 35,000 metres per day of fabric and Unit-II 20,000 mpd. After modernisation, Unit-I alone would produce 50,000 mpd. About 50 per cent of the fabric is cotton and the remaining 50 per cent blends, mainly saris, shirting and printed dress materials. He said that premier brand of cotton shirting launched in 1997-98 now constitute almost 25 to 30 per cent of the total annual turnover of Rs 60 crores.

Parikh, who took active interest in the turn around for the entire industry and whose term as chairman of Indian Cotton MillsFederation (ICMF) expired last year, expressed his reservations about the success of Technological Upgradation Fund. Not many applications have come forward so far for the same.

"What the ailing textiles industry needs most at this juncture is reducing the limit of promoters' contribution for modernisation of the existing units. The centre's recent decision to allow import of up to five year old machinerty of certain categories is a welcome step."

He expressed similar doubts about the Cotton Technology Mission, which faced the problem of quality amidst quantity. He said it was for the government to give incentives at all stages from seed growers to ginning mills, which was still not forthcoming.