Tamil Nadu textile industry accounted 1/3rd of the textile business size of the country by attracting large scale investments during 2003 to 2007 taking advantage of the cost effective and quality power supplied by Tamil Nadu Electricity Board, now TNPDCL. The industry started losing its competitiveness when the State faced acute power shortage during 2008 to 2015. Thereafter, the constant increase in power tariff and also the levy of cross subsidy surcharge and other charges have made the power intensive Tamil Nadu textile industry, especially the spinning sector, uncompetitive. This has led to lack of modernization and over 70% of the spinning capacity is more than 15 years old, resulting in Tamil Nadu spinning mills continue to incur huge losses.
As Tamil Nadu does not have raw material base b(oth cotton and manmade fibres), the State depends on upcountry for the raw material. With the steep increase in fuel price and transport cost, a spinning mill in Tamil Nadu incurs Rs.5/- to Rs.7/- per kg of raw material as additional expenditure when compared to raw material surplus States like Gujarat and Maharashtra. The State started losing its competitiveness when all the cotton and manmade fibre producing States like Gujarat, Maharashtra and Andhra Pradesh started offering huge incentives for the new investments in the textile industry.
Maharashtra considers shuttleless looms as powerlooms and supply power at a concessional rate while Tamil Nadu levies normal/regular tariff, thus making powerloom sector uncompetitive. Maharashtra has around 12 lakh powerlooms while Tamil Nadu has 6 lakh powerlooms. Tamil Nadu has around 2500 spinning mills including the open end and small-scale units. 85% of the small-scale units are located in Tamil Nadu and these units have become unviable with the steep increase in the power tariff to the tune of Rs.3.00 (40% increase) in a period of three years (LT III B). Tamil Nadu textile industry provides jobs to over 60 lakhs people directly. Under these circumstances, TNERC has hiked the power tariff from Rs.8.65 per unit to Rs.9.09 per unit for HT consumers i.e., an increase of 4.83% thus affecting the entire industrial sector particularly MSMEs in the State.
In a Press Release issued here today, Dr.S.K.Sundararaman, Chairman, The Southern India Mills’ Association (SIMA) has appealed to the Hon’ble Chief Minister to consider withdrawing the power tariff hike as the industry in Tamil Nadu has been reeling under unforeseen recession for the last 2 ½ years and several spinning mills and large scale powerlooms got closed throwing several thousands of people out of jobs. Dr.Sundararaman has strongly felt that Consumer Price Index (CPI) cannot be linked to the cost of power generation of supply as the CPI is normally used only for payment of wages and salaries to enable the employees to get suitable compensation and manage the cost of living. He has said that though the industry had objected for this when TANGEDCO proposed linking CPI to power tariff before TNERC, the plea was not considered both by TNERC and the Government. SIMA chairman has stated that this would become deterrent and counterproductive for the concerted efforts taken by the Hon’ble Chief Minister for attracting large scale investments to the State.
SIMA Chairman has appealed to the Hon’ble Chief Minister to withhold the power tariff hike for a period of two years till the industry revives from the unforeseen and long drawn recession caused due to COVID pandemic, Ukraine-Russia war and Israel – Hamas war.
