Kerala Needs Political Will to Revive Textile Sector

An expert committee has recommended one-time infusion of ₹494.81 crore in capital for comprehensive and sustainable revival of the 17 textile mills in the government and cooperative sectors.

“Practically, all 17 are government-controlled to the extent of 98.5 per cent, thanks to periodic interventions that converted loans in the existing cooperative mills to equity,” said P Nandakumar, chairman of the expert committee.

One-time infusion

The infusion of funds has to be time-bound with all 17 mills getting benefited at the same time. “It would depend on the state government’s political will,” Nandakumar told BusinessLine here.

But he doubted if the government has grasped the enormity of the task or the potential it holds for heralding a socio-economic change across the lower rungs of society. “The sector engages thousands of people. There’s no time to lose here,” he said.

The expert committee had carried out its work in association with the Coimbatore-based South Indian Textile Research Association. It has suggested that the government implement the revival strategy over a period of nine months.

Local demand

Nandakumar said the committee is convinced that the time-bound implementation would put all the mills back on the growth path and start yielding a profit from the third year itself.

“The infusion need to be one-time in all its sense. The mills wouldn’t need a paise more and would be able to upgrade on their own in five years. Imagine, the government has pumped in over ₹500 crore into the mills in the last 10 years for practically no return,” he said.

All stakeholders, including workers, stand to benefit from the revival strategy. As productivity and quality go up, wages too would follow suit. Workers would be able to earn ₹20,000 a month, on an average.

What the government seems not to factor in is the huge demand for clothes within the state itself. The per capita consumption is 34 metres in Kerala against an all-India average of 16 to 17 metres. Size of the local market is ₹3,500 crore.

‘Kerala brand’

To cater to this demand, the expert committee favoured the development of a ‘Kerala brand’ in the garment sector by combining the capacities of the spinning mills, the powerloom and handloom sectors.

“This is exactly why we’ve recommended a comprehensive and sustainable revival strategy for the sector, even going beyond our brief in the process,” Nandakumar said.

Centrally-monitored for raw material procurement and sales, among others, will bring economies of scale to play and and equip the mills to face market competition.

Capacity utilisation is expected to go up from the present 55.40 per cent to 98.50 per cent as a result of implementation of the strategy in totality and across the sector.