Textile Industry optimistic about revival
The textile industry in India is optimistic for an early revival of growth. According to a CII Industry and Economic Update, sales and profitability of the sector, especially mills and Textile & Clothing units, could improve from the lows of 2008, as some fabric and garment production units have reported a modest pick-up in international demand. This is expected to translate into higher demand for spun yarns. While spinners are reporting a slightly slack demand for cotton and polyester cotton yarns, polyester viscose yarn manufacturers continue to receive export orders.
The textile sector's financial performance was adversely impacted by the rupee appreciation in 2008, which made Indian Textile & Clothing (T&C) exports uncompetitive. Also, there is a gradual slowdown in the growth of cotton consumption caused by declining export sales and shrinking profit margins, and slowdown in domestic T&C production.
Power Sector: Need for regulatory framework
With the Textile Industry expected to do well in the coming months, there has been equal thrust towards improving the power sector performance. Dr Pramod Deo, Chairman, Central Electricity Regulatory Commission recently met representatives of the power sector and discussed concerns about generation, distribution and transmission of power and the role of private enterprises in augmenting power capacity in India.
Dr Deo said that there was a paradigm shift in 2003 when Electricity Act provided for delicensed generation of electricity. He pointed out that though as per National Power Tariff Policy there has to be competitive bidding, many states provide for 12%-13% free power to the state. This he stressed was not in sync with the National Tariff Power Policy and the anomaly need to be sorted out. He further emphasised that in power distribution franchisee route was more acceptable as an alternative to complete privatisation.
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