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Textile industry bodies appeal for status quo on Energy Policies in Tamilnadu

Published: September 24, 2019

Textile industry bodies appeal for status quo on Energy Policies in Tamilnadu

Tamilnadu textile industry that accounts for 1/3rd of the textile business, 47% of the spinning capacity providing direct jobs to over 60 lakhs people especially to rural masses & women folk and fetching Rs.60,000 crores as forex earnings, is the worst affected in the country under the current unprecedented recession due to raw material / finished goods transport cost and several other factors.  Under these circumstances, the proposal of TANGEDCO to curtail certain lifeline benefits such as wind power banking, group captive power purchase by MSMEs for less than one MW, removal of old wind mills (repowering), etc., have come as a rude shock for the ailing textile industry in Tamilnadu.

In a joint Press Meet held today by the National and Regional textile industry bodies viz., Confederation of Indian Textile Industry (CITI), Cotton Textiles Export Promotion Council (TEXPROCIL) and The Southern India Mills’ Association (SIMA), Mr.T.Rajkumar, Chairman, CITI, Dr.K.V.Srinivasan, Chairman, TEXPROCIL and Mr.Ashwin Chandran, Chairman, SIMA, have appealed to the Hon’ble Chief Minister to continue the existing energy benefits like wind power banking, group captive power purchase by MSMEs for less than one MW and removal of wind mills of over 25 years old to enable the textile industry in Tamilnadu to remain competitive both for the domestic and international markets especially when most of the cotton growing States continue to offer 10% to 15% subsidies including Rs.1.5 per unit power subsidy even for the existing units.

1) Open access power for less than one MW

The Government of Tamilnadu on 17.4.2018 issued a GO Ms.No.37 giving a direction to the Hon’ble TNERC to curtail the open access in the case of industrial units having less than 1 MW.  There are more than 1500 MSME textile mills operating in Tamilnadu and they are sourcing open access power either under group captive or through their own wind mills.

If the open access is denied for the MSME textile mills, the textile industry in Tamilnadu will not be able to survive and will lose the status of 1/3rd of the textile business size in India.    When the whole Indian economy is under stress, the restrictive move on the part of Government of Tamilnadu for curtailing the open access for industrial units having  less than 1 MW will affect more than 1500 textile units in Tamilnadu.  Therefore, it is appealed to kindly continue to extend the open access facility for industrial units of less than 1 MW.

2) Wind mills banking facility

In order to sustain the competitiveness both in the domestic and export markets, the textile mills in Tamilnadu started making huge investments by erecting wind mills since 1986.  The textile mills in the State survive mainly because of advantage in power cost due to installation of wind mills with the facility of banking so far.  The Tamilnadu Government encourages erection of wind mills by providing banking facility since 1990.  The Tamilnadu Electricity Regulatory Commission (TNERC) provided banking facility for the mills upto March 2020 and the TANGEDCO as per the Commission’s Order is charging 14% of the wind energy as banking charges.

TANGEDCO cannot incur any loss on account of banking facility.  Hence, the banking facility may be continued and even if TANGEDCO is incurring any loss on this score, the industry has already assured that wind mills will compensate for the banking losses.

3) Removal of old wind mills/ Repowering

The textile industry has sizably invested in wind mills several years back as a result of which the power charges have considerably reduced for the textile mills in Tamilnadu and they are able to compete in the domestic and export markets.  While so, the recent instructions of TANGEDCO not to wheel and adjust the power generated by wind mills which served its life time of 20 / 25 years will have an adverse effect.  Therefore, so long as the wind mills are having the stability and able to perform, it must be allowed to generate power without insisting for removal of those wind mills and erecting new wind mills in their place.  Erection of new wind mills will involve huge capital which at present, the industry is not able to afford.  Therefore, old wind mills are to be permitted to continue their wheeling for the captive consumption.

4)Remove 1% Agricultural Market Committee Fee on Cotton Waste

The cotton textile mills in Tamilnadu have been demanding for the removal of 1% Agricultural Market Committee Fee levied on cotton waste for several years.  Tamilnadu produces only 5 to 6 lakhs bales of cotton while the industry annually requires 120 lakhs bales of cotton and source the same from upcountry and also through imports.  There is no logic in levying Agricultural Market Committee Fee on the byproduct of cotton i.e., cotton waste. The Agricultural Market Committee does not render any service for the outsourced cotton and any waste produced out of the cotton.  Further, no other State in the country levies such a Fee on the cotton waste.  Therefore, it is requested to remove the 1% Agricultural Market Committee Fee levied on cotton waste in the interest of the spinning, handloom and powerloom sectors.

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