Rigid labour laws hold back new textile parks scheme: Industry

By Staff
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Google Oneindia News

Ahmedabad, Mar 19: The scheme for Integrated Textile Parks (SITP) launched with fanfare few months back remains a non-starter even after merging the two earlier not-so-successful schemes for Apparel Parks and Textile Parks due to rigid labour laws.

While Union Textile Minister Shankarsinh Vaghela in his inaugural address at the 'Indo-US Summit: Context 2006' here today assured the industry that the issue would be sorted out soon, Textile Commissioner J N Singh hinted the government would have to take into consideration global trends.

Mr Vaghela said the Indian textile industry's demand was longer working hours for the workers with rights to hire and fire. He said it is being considered at the highest level.

He admitted that one of the reasons for the Chinese success story was that there were no labour laws, but added that India could not afford that.

The Minister used the forum, provided by Indo-American Chamber of Commerce, to tout SITP as an ideal scheme to invest, combining it with Technology Upgradation Fund Scheme (TUFS) offering five per cent interest subsidy and 10-20 per cent capital subsidy.

He said there was no ceiling on the number of such SITPs that could be opened in any state.

So far, four SITPs had been sanctioned, including two in Gujarat.

The fifth proposal for SITP for Processing Units to be set up in Ahmedabad was under consideration, he added.

When launched last quarter, the government had announced setting up 25 such SITPs, each having at least 50 units with total investment of Rs 750 crore to provide jobs to 20,000 persons, with a grant of Rs 850 crore from the Centre - creating 500,000 new jobs. He said one could have option of setting up SITP as special economic zones (SEZ) or export oriented unit (EOU) or a domestic unit, because the domestic demand particularly for garments and apparels was also projected to grow.

In the face of it, SITP guidelines are explicit about land, common infrastructure like roads and water supply, factory, machinery, testing labs and even about labour rest rooms, was conspicuously silent on labour laws.

Mr Singh, in his address, also called for formulating labour laws in India in consonance with global trends in view of the violent protest the new French labour law for under-26 on two years contract with powers to fire them indiscriminately.

Indo-American Chamber of Commerce president B Prabhakar in his welcome address called for relaxing and liberalising labour laws, since the rigid laws and high power costs were having a crippling effect on the industry.

Mr Prabhakar said many prospective investors were shying away because of stringent labour laws. Some states have relaxed laws in case of SEZs. Similarly, laws for EOUs should also be relaxed for EOUs to start with, he said.

Several other speakers participating in the two-day summit stressed on the need for fusion of fibre, fabric and fashion, because ultimately fashion would be the guiding factor for deciding the fabric for the growing apparel market.

The summit, being organised when the Indo-American relation is at its peak post-Bush visit to India, the delegates hoped Foreign Direct Investment (FDI) would now start flowing into India for the vital modernisation of textile machinery.

Central government's Textile Committee chairman Nayan Parikh laid stress on money, manufacturing practices and moving up the value-chain to realise the target of National Textile policy 2000-2010.

Indian textile industry needed Rs 140,000 crore for modernisation. The process was so far slow, but has picked up pace recently. About Rs 30,000 crore have already been spent under TUFS another Rs 20,000 crore under other heads. The industry must spend another Rs 90,000 crore dring the next four years, Mr Parikh added.

UNI

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