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Maharashtra's spinning mills demand to increase electricity exemption

2021-11-17 14:39:15
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Maharashtra's spinning mills demand to increase electricity exemption


Top officials of the Maharashtra State Cooperative Textile Federation (MSCTF) said the exemption given by the state government to spinning mills on purchase of power will expire by the end of December this year. The state government had given a three-year subsidy of Rs 3 per unit to the mills till December 31, 2021. In these three years, the mills are expected to set up solar power plants in their premises in lieu of subsidy.


MSCTF President Ashok Swamy said the MSCTF, along with representatives of cooperative spinning mills, met the Maharashtra State Textile Commissioner in Nagpur last week and sought further extension on power exemptions. “Mills are currently finding it difficult to procure cotton for their requirements due to high commodity prices. Higher electricity rates will add to their problems." Swamy pointed out that none of the mills have set up solar power plants as permission has been given for power plants with only 1-MW (MW) capacity, which is barely two hours. He said that unless the government relaxes this condition and gives permission for 10 MW to 12 MW power plants, it is not viable for mills to set up these plants.


He said that the price of cotton has increased from Rs 38,000 per candy to Rs 68,000 per candy and it has become difficult for the mills to buy cotton for their needs. He said that the market condition is very bearish due to low demand for textiles. The slowdown in the textile industry for the last five-six years, higher electricity rates than other states, rising cotton and yarn rates with no increase and high interest rates on bank loans have created a financial crisis for the industry. . , He said higher power rates would lead to a total collapse of the mills. He said these problems were taken up with State Textiles Minister Rajendra Patil and Textiles Secretary Parag Jain last week. Swamy said the mill owners would now seek relief from Chief Minister Uddhav Thackeray to give further extension on power subsidy to the industry and the government besides allowing large capacity solar power plants.


Out of the total 150 cooperative spinning mills in the state, only 80 mills are currently functioning with an installed capacity of 15 lakh spindles per day. The annual requirement of cotton is around 12-13 lakh bales and the sales turnover is Rs 2,500 crore annually. The state government has invested Rs 2,500 crore as share capital in these mills. These mills give revenue in the form of various taxes of Rs 200 crore to Rs 250 crore annually to both the central and state government.


Mahasangh Managing Director Ramchandra Marathe said that the mills have approached the Center to check the high prices of cotton. “Small family-run looms in the state face major problems as they have to close their units if they cannot afford the cotton prices,” he said. Pradeep Jain, president of Khandesh Gin Press Development Association, said that cotton prices have come down by Rs 1,000 to Rs 2,000 per candy and have come down from Rs 68,000 per candy to Rs 66,000 per candy since last week. He said that the arrivals in the market have increased and the farmers have realized that the prices cannot increase any more. In the first week of November, the price of cotton had touched Rs 10,000 per quintal in some mandis.


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