ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Sickness and Growth of India s Textile Industry-Analysis and Policy Options

This article, in two parts, examines the current state of India's textile industry. In 1985 there was an inclination on the part of the government to take a close look at the status of the industry, and suggest methods of rationalisation. Nothing much was done and, if anything, the hand loom and mill sectors are far worse off today than they were five years ago. The first part of the article examines the patterns and determinants of household demand for clothing. If the government feels the need to increase per capita purchase of textiles, then there is a strong case for altering relative prices of man-made fibres through a systematic reduction in tariffs. Part II looks at four important issues: powerlooms versus mills; powerlooms versus handlooms; rationalising the workforce in the mill sector; and the myth of modernisation. The data compels the conclusion that there is very little hope for most of the composite mills, especially the nationalised ones, in the face of competition from powerlooms. The options that exist are closely linked to rationalising the labour force which, in turn, requires a definite policy decision by the government backed up by an attractive voluntary retirement package

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