Textile sector lost 42 pc jobs to closed mills

Textile sector lost 42 pc jobs to closed mills

About 30 per cent of all textile factories in India were non-operational as of 2010-11, which led to a massive job loss of 42 per cent in the sector, according to a study.

Tamil Nadu, which accounted for about 54 per cent of the non-operating textile units, incurred the maximum job loss — of over 2 lakh — during the period.

“Of the total 17,987 textile factories across India, about 12,688 factories were operational and about 5,300 non-operational as of 2010-11,” said the study titled “State-wise Assessment of Textile Sector & Recommendations”, conducted by the Associated Chambers of Commerce and Industry of India (Assocham).

“While the total number of textile factories grew at a compounded annual growth rate (CAGR) of about 5 per cent during the decade of 2000-01 to 2010-11, the number of non-operational textile factories grew a whopping 23 per cent, and the number of textile factories under operation grew at a CAGR of a meagre 2 per cent,” said the study.

The five states of Tamil Nadu, Gujarat, Punjab, Maharashtra and Uttar Pradesh together accounted for about 88 per cent of these non-operating factories.

“Tamil Nadu alone accounts for about 54 per cent of the non-operating textile units, followed by Gujarat (16 per cent), Maharashtra (over 10 per cent), Punjab (over 4 per cent) and UP (over 3 per cent),” said the report.

Gujarat registered the maximum growth, of about 39 per cent CAGR, in non-operational textile units — from over 290 factories to over 2,800 factories — during 2000-01 and 2010-11, followed by Punjab (35 per cent), Haryana (32 per cent), Himachal Pradesh (26 per cent) and Tamil Nadu (25 per cent).

“Low productivity, lack of advanced manufacturing technologies, lack of foreign investments, supply chain bottlenecks, lack of economies of scale, labour-related challenges, issues arising due to a fragmented industry and weak brand positioning are key reasons for non-operation of textile units,” said the report.

“Increased domestic competition, together with competition from global players and high initial investment cost for state-of-the-art production facilities, are other emerging challenges being faced by the Indian textile industry,” it added.

The share of jobs lost due to non-operation of textile factories in India has increased from over 6 per cent in 2000-01 to about 42 per cent in 2010-11.

As per the Assocham Research Bureau, Tamil Nadu incurred the maximum loss of over 2 lakh job opportunities, followed by Gujarat, which lost over 1 lakh employment opportunities due to non-operation of textile factories.

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