Mumbai: The benefit of 5% incentive on exports of cotton given effect retrospectively from 1 April, 2008, would not reach the intended beneficiaries, a top industry official has said.
With the cotton season already over and most farmers having sold their produce, the aim of the government to provide relief to cotton producers would not be achieved, Textiles Export Promotion Council (Texprocil) chairman V S Velyutham said in a statement here.
Reacting to the Centre’s decision to provide 5% incentive for cotton exports and allow government agencies such as Cotton Corporation of India (CCI) to provide discounts for bulk purchase, he cautioned that these measures could become counter-productive if some other steps are not taken immediately.
“These measures, though well-meaning, could become counter-productive and detrimental to overall growth of Indian textile industry, if simultaneous steps to protect the interests of value-added segments such as yarn, fabrics and home textiles were not taken immediately,” he said.
The export competitiveness of the Indian textile industry is already reeling under the pressures of high cost of cotton on account of an unrealistic rise of over 40% in its MSP (minimum support price), Velyutham said.