Maharashtra spinning mills seek extension of power rebates

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Updated: November 17, 2021 8:33 AM

The state government had granted a three-year subsidy of Rs 3 per unit to the mills until December 31, 2021.

Maharashtra spinning millsOf the total of 150 cooperative spinning mills in the state, only 80 mills are currently functional with an installed capacity of 15 lakh spindles daily. (Representational image)

The rebate given by the state government to spinning mills on purchase of power will expire by the end of December this year, top officials of the Maharashtra State Cooperative Textile Federation (MSCTF) said. The state government had granted a three-year subsidy of Rs 3 per unit to the mills until December 31, 2021. The mills are expected to set up solar power plants at their premises in these three years in lieu of the subsidy.

MSCTF, along with the representatives of cooperative spinning mills, met the Maharashtra state textiles commissioner in Nagpur last week to seek a further extension on the power rebate, Ashok Swami, chairman, MSCTF, said. “The mills are currently finding it difficult to purchase cotton for their requirements because of the high prices of the commodity. The high electricity rates will only add to their problems,” he said. None of the mills have set up solar power plants because permission has been granted only for 1-megawatt (MW) capacity power plants, which generate electricity for barely two hours, Swami pointed out. It is not viable for mills to set up these plants unless the government relaxes this condition and grants permission for 10-MW to 12-MW power plants, he said.

Cotton prices have gone up from Rs 38,000 per candy to Rs 68,000 per candy and it has become difficult for mills to purchase cotton for their requirements, he said. The market situation is pretty bearish because of low demand for textiles, he said. The recession in the textile industry since the past five-six years, higher electricity rates than other states, rising cotton prices and no increase in yarn rates, and high interest rates on bank loans have led to financial distress for the industry, he pointed out. The high power rates will lead to a total collapse of the mills, he said. These problems were raised last week with the state minister for textiles Rajendra Patil and Parag Jain, secretary, textiles, he said. The millers will now approach chief minister Uddhav Thackeray to seek relief for the industry and the government to grant a further extension on power subsidy in addition to permission for bigger capacity solar power plants, Swami said.

Of the total of 150 cooperative spinning mills in the state, only 80 mills are currently functional with an installed capacity of 15 lakh spindles daily. The annual cotton requirement is around 12-13 lakh bales and the sales turnover are Rs 2,500 crore annually. The state government has invested Rs 2,500 crore in these mills as shares capital. These mills give revenues to both the central and state government in the form of various taxes of Rs 200 crore to Rs 250 crore annually.

Ramchandra Marathe, managing director of the federation, said that the mills have approached the Centre to seek a cap on the high cotton prices. “The small family-run looms in the state face bigger problems since they have to shut down their units if they cannot afford cotton prices,” he said. Pradeep Jain, president, Khandesh Gin Press Development Association, pointed out that cotton prices have dropped by Rs 1,000 to Rs 2,000 per candy and have come down to Rs 66,000 per candy from Rs 68,000 per candy since last week. Market arrivals have increased and farmers have realised that prices cannot go up further, he said. Cotton prices had touched Rs 10,000 per quintal in some mandis in the first week of November.

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