This had created an impression that there was some automatic brake on more closures of textile units. But these expectations proved wrong in the following month.

If one looks back one may find that in 1998-99 there was the highest number of mill closures in recent years. As many as 93 textile mills rolled down their shutters during the year.

They included 80 spinning and 13 composite units. In the earlier years, the total number of additional mill closures was 39 in 1995-96; 38 in 1996-97 and 11 in 1997-98.

According to sources close to the industry, 1998-99 was one of thetoughest years for it. So far as the spinning sector is concerned, the demand for its yarn remain depressed as powerloom units found it difficult to sell their fabrics. A number of such decentralised weaving units remained internationally closed during the year.

On the export front, there was some quantitative improvement in the last quarter of 1998-99 after a setback in the earlier three quarters. However price realisations remained far from attractive. Those units which wanted to remain in production had however no alternative, but to sell even at depressed prices.

This has affected economic viability of several units. A number of 100 per cent export-oriented units which had been set up with high hopes were in a bad shape.

Even now about 50-60 per cent of the power loom units remained closed and those that are functioning are working on four-days-a-week basis in order to keep down production and avoid inventory build-ups.

So far as composite units are concerned, many of them were in a dire straitin view of depressed domestic demand. Most of them catered to internal demand as they could not offer international quality of products.

However, purchasing power of the domestic consumer remained more or less crippled. They were inclined to postpone their purchases as long as they could. Under such a situation, internal market- oriented mills had problems in selling their production.

Export markets also were not quite favourable for Indian fabrics. Yet some export- oriented textile mills tried to step up exports even at lower prices.As a result there was an overall marginal improvement of 3.24 per cent in exports of fabrics and made ups, but a fall of 10.02 per cent in the export of yarn and sewing threads in value terms in 1998-99, compared with the same in the earlier year.

It is quite possible that prospects for the textile industry may improve in 1999-2000. It is hoped that a good monsoon, as predicted, might result in higher agricultural production in the coming kharif season. This may place morepurchasing power in the hands of rural masses.

Industrial economy is also showing some signs of recovery. Similarly, there are some signs of recovery in East Asian markets. This may lead to some improvement in demand for cotton yarn as well as fabrics, unless some other adverse developments upset such expectations.