Textile industry in Tamil Nadu, which accounts for one-third of the overall textile production in the country, may soon come to a grinding halt as the full blown power crisis sweeping across the state has landed many units on the verge of closure.
The industry is facing the prospects of a complete stoppage of work in the absence of a concrete solution for the power shortage. With the revised regulations announced by the state government on Monday, which will come to effect from November 1, the textile mills would face a shortage of over 50% of their demand for power.
The situation has forced the textile mills, especially those located in Coimbatore region, and over 30 other industry associations affiliated to the Coimbatore District Small Industries Association to call for a one-day strike on Wednesday to press the authorities to work out a solution.
KV Srinivasan, chairman of the Southern India Mills? Association (SIMA) said that ?the Tamil Nadu textile industry providing direct and indirect employment to about one crore persons, accounting for 60% of the yarn export, 50% of the spinning capacity, consuming 110 lakh bales of cotton, accounting for one-third of the textile size in the country will come to a grinding halt in the absence of a concrete solution for the power shortage. The highly labour-intensive textile industry will be forced to throw several lakhs of people out of jobs leading to industrial and social unrest. Even the disbursal of the agreed upon bonus may be in jeopardy owing to the acute financial crunch?.
Government?s intervention and support was essential to save the fresh investments of over Rs 50,000 crore, with Rs 35,000 crore in the textile sector alone, during the last five years, he said.
SIMA has a concrete solution?the HSD model to tide over the crisis and ensure uninterrupted power supply and the survival of the industry. It is the utilisation of at least half of the 4,000 mw captive generation capacity, of which 3,500 mw is HSD oil generators, with the industry. SIMA sources said the VAT waiver on diesel would not set off the loss the industry would have to incur to generate power.
Power through the HSD model would cost about Rs 12.75 a unit, including a margin of 25 paise for the industry. The TNEB energy cost is Rs 3.50 a unit. The excess cost for the diesel power is Rs 9.25 per unit. This is proposed to be shared by the government (75%) and industry (25%). At that rate the burden on the government for 1,000 mw would be Rs 2.43 crore and the industry Rs 81 lakh. The industry?s share could be collected at the rate of 53 paise per unit from the HT consumers.
Srinivasan said the mills were expecting a favourable decision on this front from the government. But the net result of the new regulation was “40% energy cut and four hours peak hour restriction (6 pm to 10 pm) for the HT industries. The new announcement has increased the power shortage from 40% to 50%??. The SIMA chief said the industry was asking for only uninterrupted power supply and not any subsidy from the government. “Since the fuel cost is very high, a government helping hand is very much essential?, he said.
The industry associations are also asking for an equal distribution of the power shortage across the state. They want the government to enforce the power cut to all multinational companies which have been ensured uninterrupted power supply as per the MoUs and also Chennai which has been all along enjoying either uninterrupted power or the benefit of one to-one-and-half hour power shut down as against 10 hour power shut down in all other parts of Tamil Nadu.
Srinivasan said the one-day stoppage of production would result in a loss of Rs 50 crore to the spinning sector having over 2000 units, and Rs 230 crore loss to the entire textile industry in the state. The stoppage would result in Rs 7.5 crore revenue loss for TNEB, Rs 1.5 crore loss to the state government and Rs 1 crore loss to the Centre.
Industry sources in Tirupur said the knitwear sector was not participating in the one-day agitation. They have been managing the power cut with captive generation and reduced working hours. The impact of the power crisis could be known only after Deepavali, they said.