The government is set to introduce the Cotton Development Bill in the winter session of Parliament. The legislation will outline the strategy for cotton exports with a proposal to establish the office of director general for cotton intelligence.
Commerce, industry and textile minister Anand Sharma said that there would be inter-ministerial talks next month to take a comprehensive view on cotton exports. The inter-ministerial talks will review the cotton arrival data, including the surplus, before allowing exports beyond the ceiling of 65 lakh bales for the current cotton season.
Sharma said that the panel, which is chaired by finance minister Pranab Mukherjee, would review crop arrivals in the mandis, availability and exportable surplus of the fibre. Also, cotton arrival data maintained by the Cotton Advisory Board (CAB) will be studied, the newly appointed textile minister said.
He added that in his upcoming meeting with the finance minister, he would recommend the restoration of tax refunds on cotton yarn exports with effect from April 1, 2011. The tax benefit was withdrawn in April 2010 after which the industry has been emphasising on an estimated loss of R11,000 crore in the sector due to measures like withdrawal of export incentives, restrictions on exports, and imposition of excise duty.
?The textile industry is undergoing a rough trajectory. The crash in yarn prices, drastic demand erosion in the domestic and international markets along with withdrawal of export incentives that helped its price competitiveness, imposition of steep excise duty of 10% on branded garments and imposition of quantitative restrictions on yarn exports is impacting the sector,? said Shishir Jaipuria, chairman, Confederation of Indian Textile Industry (Citi) who was also present in the meeting.
Sharma indicated that after the expiry of the tax-incentive Duty Entitlement Passbook (DEPB) scheme on September 30, a robust form of the duty drawback would be introduced to compensate losses of the exporters due to withdrawal of DEPB scheme.
Sharma said that the government will also ensure that it resolves problems faced by garment units in Tirupur because of environmental issues. ?I have requested the secretary (Textiles) to travel to Chennai to hold a dialogue with the chief secretary (of Tamil Nadu).? In January this year, the Madras High Court had ordered the closure of dyeing and bleaching units in Tirupur for discharging effluents polluting the Noyyal river.
