In March 1998 the total number of closed mills stood at 220 (including 127 spinning and 93 weaving units). Thus in just 17 months as many as 103 textile mills became idle depriving nearly 57,000 employees of their jobs. If one takes their dependent family members into consideration, nearly 2.5 lakh people were thus directly and indirectly hit by the closure of these textile mills, but nothing seem to move New Delhi.

This, according to analysts, was largely due to failure of the textile policy pursued by the government. If another sign was needed it was according to them, provided by the fact that though the domestic supply of cotton was more than adequate to meet the local demand, huge imports of this natural fibre took place in 1998-99 season, leavingthe country with an unprecedented opening stock at the start of the current season. In view of this, cotton cultivators were put to substantial losses. Textile Commissioner BC Khatua belatedly observed last month that the "mill sector has not been friendly with farmers and despite domestic cotton availability, went in for large imports".

Meanwhile, in view of unwieldy inventories and large new crop estimated by the textile commissioner at 180 lakh bales, cotton prices have started shrinking further and the cultivator may be punished for increasing his production. It is not known what the government wants to do about this.In view of the excessive excise burden on textiles (including the proverbial last straw in the form of a steep hike in excise levy on cotton yarn in the last Budget) and the crippled purchasing power of the masses, the demand for cloth remains weak. Even exports remain depressed but the Reserve Bank of India (RBI) is refusing to relax export credit.

Neither is the government taking anyinitiatives in this direction. The industry may therefore have to wait at least till the next annual Budget of the government to find out what lies in store for them. The Budget is however nearly four months away. It is difficult to say how many more mills may close down adding to the unemployment in the process. Despite improvement in the offtake of cotton yarn by certain non-quota countries overall textile exports remain disappointing.

Export of cotton textiles used to have an average annual growth of 22 per cent during the five-year period ending 1996-97. This growth rate nosedived to six per cent in 1997-98 and turned three per cent negative in 1998-99. Modernisation of the textile industry is the crying need of the hour. No doubt the government has introduced for the purpose a technological upgradaetion fund scheme, but it has not undertaken any exercise to ascertain why most mills in the organised sector are apathetic. With the increasing threat of competition even in the domestic market such a policymay prove unhelpful. The official approach to modernisation however remains muddled. If the cotton mill industry and cultivators are to survive and remain healthy, the government may do well to abolish all levies on cotton yarn as well as cotton fabrics.

Though exports of cotton yarn, particularly to non-quota countries have no doubt improved in the first six months of the current year, overall textile shipments in the same period have been better by just 3.6 per cent. This rate of export growth is far from satisfactory when compared with that in some periods of the earlier years. However, no fresh initiatives are forthcoming either from the government or the RBI to enable the industry to remain its earlier position in the export markets. Exporters are thus, more or less, left to fend for themselves.