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01 Mar 2024, Edition - 3153, Friday

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

Covai Post Network


Coimbatore : Though increase of MSP by 4.75 per cent for medium staple cotton and and 4.95 per cent for long staple cotton would greatly
benefit the cotton farmers is a welcome step, Southern India Mills’ said that increasing the MSP is not a sustainable solution and the Government needs to focus on bringing back the Technology Mission on Cotton (TMC).

The minimum support price for seed cotton (kapas) for medium staple has been increased from Rs.5,255 to Rs.5,515 per quintal and for long staple, it has been increased from Rs.5,502 to Rs.5,825 per quintal 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, 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 pointed out in a statement.

Referring to modifying the definition of MSMEs he said that though five times 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 textile industry like spinning, weaving, processing and technical textiles.

This will encourage modernization 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 crores, 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 bailout 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. 

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