New Textile Policy

– A Policy of Dark Intent

Pratyush Chandra

LIBERATION, Vol.7 No.10, December 2000
(Published with some modifications)

It was way back in 1765 when Adam Ferguson declared that capitalist industries “prosper most where the mind is least consulted.” Hence, it is but natural that the Government decided the fate of the millions of “helots” toiling in the textile industry without consulting the trade unions, by proclaiming the New Textile Policy (NTP) on 2nd November.

The textile industry contributes 20 percent of the value addition in the manufacturing sector. Its contribution to GDP is 4 to 5 percent and export earnings exceed 30% of the total exports of the country. Garment exports stand out as the single largest foreign exchange earner. It becomes obvious for the global profiteers to stress upon the opening (or de-reservation) of this sector to prosper on its potentiality.

Even prior to the constitution of Sathyam Committee, which became the basis for the formulation of the NTP, the Government(s) had started responding to the global ‘cry’. The whole approach could be seen from the annual rate of closing down of the units dramatically being crossed within the very first few months of the year 1998-99 when 64 textile mills (57 spinning and 7 composite mills) were closed down till December ’98. 8 out of the 9 subsidiary corporations of the National Textile Corporation Ltd. (NTC) had already been referred to BIFR, which declared them as sick companies. Proclamation of sickness and closure has been the most prominent mechanism to discredit the public sector industrial units and in building consensus on their sell-off, ever since the Indian State embraced the monetarist logic of IMF/WB. Regarding the organised textile industry, the main reason cited by the governments for sickness and closure is “structural transformation resulting in the composite units in the organised sector losing ground to powerlooms in the decentralised sector, on account of the latter’s greater cost effectiveness” (Ministry of Textiles, Annual Report 1998-99, pp.15).

Sathyam Committee appointed in 1998 by the state thus oriented, could not be expected to come out with anything but solid rationalisations for the policy, make it more target-oriented and evolve an efficient strategy for its implementation. It categorically stated that reservation is meaningless in a liberal and global economy. Hence along with the deregulation of Public Sector Mills, the protection of Small-scale Industrial (SSI) Sector has also to be revoked.

Since immediate full-fledged implementation of these recommendations could be outrageous, the swadeshi government has decided to implement them in instalments. The New Textile Policy as the first dose sets off a target to increase textiles and apparel exports to $50 billion by 2010 from the present level of $11 billion. It commits “to encourage the private sector to set up integrated complexes and units and to assist it in setting up special financial arrangements to fund the diverse needs of the industry.” Effectively, since the State itself diagnosed the composite character of the textile mills to be problematic, the new policy tends to erase it through the transference of weaving sections to the big monopolies-run decentralised powerloom sector.

Leaving the Handloom Reservation Act (HRA) and the Hank Yarn Obligation Scheme (HYOS) untouched for the time being, the new policy has already started building a consensual regime by adopting a slow dose policy towards de-reservation. It envisages a cent percent opening up of the garment sector. The ‘decentralised’ small-scale garments industry, which (despite all kinds of legal protection for SSIs) is already oppressively harnessed by the big finance and mercantile capital through credits and ‘putting-out’ system, would now be legally subjugated. It is not at all a secret that the so-called decentralised sector’s efficacy thrives essentially on the insecurity of contractual/casual workforce.

Regarding the untouched HRA and HYOS, it would suffice to mention that waiving-off the quantitative restrictions on imports has already delimited their provisions by de-reserving various handloom items. Further, the government has already accepted the proposal for restructuring the handloom and powerloom sectors into three tiers. Sathyam Committee on the basis of changes in the post-WTO phase has itself recommended a search for “alternative avenues of livelihood for the weavers of the second and third tiers” of the handlooms sector, which would eventually close down.

The policy claims that the dismantling of the quota regime (multi-fibre arrangement) by the year 2004 would further enhance the export of the textile products and garments. The protectionist posture by the developed countries in the name of anti-dumping policy belies this optimism. In fact, duty-liberalisation on our part would further make the balance-of-payments unfavourable for us.

Regarding the hype of “technology mission”, modernisation and mechanisation for a labour intensive industry like textile, in general, would definitely raise the level of redundancy further and in order to tame its implications, labour laws would be further revamped and authoritative socio-political laws would be framed to curb any social fall out. Despite vows like raising cotton production by 50%, the ‘profiteer’-oriented NTP continues with a pro-synthetic policy followed over the last many years and would further add to the sad plight of the cotton-growers.

The NTP is undemocratic in its very essence and content. In its desperation to serve the interests of the owner of capital, it betrays the vast majority of the variables in the “complex sectoral dispersal matrix” constituting the textile industry – workers, artisans, weavers and farmers. The unceasing demand of the workers’ organisations to even discuss the Sathyam Committee Report on the basis of which the NTP was framed, was never taken heed of. It only corroborates the fact that “the ‘retreat from the state’ has not, in general, reduced the role of the state or made society less bureaucratic, but it has meant a direct (re-) commodification of many aspects of social life.” (Bonefield & Holloway, Global Capital, National State & Politics of Money, pp.1)