Increasing MSP on cotton not a sustainable solution, bring back TMC: SIMA

The Southern India Mills Association (SIMA) welcomed the increase of MSP on cotton as it would benefit cotton farmers, while saying it was not a sustainable solution and called for bringing back the Technology Mission on Cotton. The minimum support price for seed cotton (kapas) for medium staple has been increased from Rs 5,255 to Rs 5,515 per quintal (by 4.75 per cent) and for long staple, it has been increased from Rs 5,502 to Rs 5,825 per quintal (4.95 per cent) on Monday.

Reacting to the announcement, SIMA Chairman, Ashwin Chandran said though increase in MSP would benefit the farmers, it was not a sustainable solution and the government should bring back the TMC, in a revised format. This, he said was to increase the productivity which is half that of other major cotton producing countries, improve quality by reducing contamination and trash cotton by adopting global best practices.

With the current market price for cotton and expected accumulation of stocks due to COVID-19, the government would need to allocate huge funds for the forthcoming cotton season as the country would produce at least 25 per cent higher than the domestic requirement, apart from a carryover of 125 to 150 lakh bales of closing stock in the current season, he said in a statement. With reference to modifying the definition of MSMEs, he said though five-fold hike in MSME limits is a great relief for the textile industry, the government should consider modifying the definition from "investment and turnover basis" to "investment or turnover basis" to further extend benefits to capital intensive sectors of the textile industry like spinning, weaving, processing and technical textiles.

This will encourage modernisation and increase scale of operation so that these segments can improve their global competitiveness, he said. Stating that prior to the recently announced changes, the investment limit for a medium sized industry was only Rs 10 crore when compared to the new limit of Rs 50 crore, Ashwin said that increasing the sales turnover limit to Rs 250 crore from the recently announced turnover of Rs 100 crore, while excluding export sales turnover from this calculation, would greatly benefit the highly labour intensive and fragmented textiles and clothing industry.

Ashwin also welcomed the allocation of Rs 4,000 crore towards distressed fund to bail out MSME units under NPA category and also allocating Rs 10,000 crore fund on fund to enable the high performing MSME units to get listed in the stock market and gain advantage.PTI NVM SS PTI PTI.