As cotton textile mills in Telangana are facing a severe shortage of raw cotton, the Telangana Spinning and Textile Mills Association (TSTMA) has urged the state government, ministry of textiles and Cotton Corporation of India (CCI) to rescue this labour and capital intensive industry.
Textile mills in Telangana require at least 50,000 bales per day to be allocated through e-auction at reasonable prices to tide over their current crisis.
The Association has blamed the CCI for adopting what it called unfair trade practice by not offering sufficient cotton to the spinning and textile mills in Telangana. This has resulted in huge price increase of the commodity, making the textile industry unviable, it said.
The Association said the CCI procured maximum cotton in the states of Telangana and Andhra Pradesh through minimum support price (MSP) operations but there is still a huge shortage. CCI is holding 83 lakh bales of cotton all over India which is enough for the mills consumption for another 4 to 5 months even if 50,000 bales are offered on daily basis through e-auction.
Telangana has about 10 lakh spindles of which 8 lakh use cotton and the rest use other fibres like synthetic and viscose. Unavailability of cotton is forcing mills to operate on less than full capacity or procure cotton from Maharashtra or Madhya Pradesh, which is economically unviable.
The state is also losing money as mills are procuring cotton on CST basis and the loss is almost Rs 65 crore per year on VAT. This can be avoided if CCI offers its bales at market price to the mills, the Association added.
Earlier this month, the cotton textiles export promotion council (TEXPROCIL), the Confederation of Indian Textile Industry (CITI) and the Southern India Millis Association (SIMA) had criticised the CCI for not releasing cotton into the market to ease the shortage of raw material.