Age, it seems, does not provide any guarantee or safety for survival. In fact, like humans, the older a mill the greater are its chances of collapse. Recent research has indicated that life expectancy of a large multi-national company is 40-50 years and that in Europe and Japans, a company does not survive for more thans 13 years on the average. Hence, our mills have done well to live for 100 years or more. There was a time when the names of cities like Manchester in England and Dundee in Scotland were synonymous with the manufacture of cotton fabricand jute hessian. Not a single meter of either kind of fabric is now being made in these two cities and all mills have closed down. Does a similar fate await Mumbai, Ahmedabad, Kanpur and other textile cities? Perhaps.

The origins of the debacle of the cotton mill industry go back some 45 years, when the government took a decision that mill capacity would be frozen and that except for exports, all future demand would be met by handloom cloth using hand spun yarn. Many categories of fabric were reserved for handloom weavers and in addition, the mill industry had to pay excise duty while handloom cloth was not only free from this burden but was also subsidised. This applecart was upset by the handloom weavers themselves who refused to accept hand spun yarn. A strong lobby developed in Uttar Pradesh and they complained that hand spun yarn was unusable and demanded only mill spun yarn. Thus, government's intentions were put to an end at an early stage, but the reservation and protection for handloom weavingcontinued.

This provided an excellent opportunity not for handloom weavers but for the growth of the powerloom weaving industry.

A powerloom is a loom run on power and is defined as such to distinguish it from the handloom. In local parlance, it has also come to mean a power operated loom in the decentralised sector. The benefits of the policy to protect handloom weavers and to restrict the organised mill industry, were felt almost entirely by the powerloom sector. From a start of some 10-15,000 powerlooms, the number has grown to over 1 million. Whole new townships have sprung up, such as in Bhiwandi, Malegaon and Ichalkaranji where the main occupation is weaving on powerlooms.

The merchants who run these looms have had the benefit of cheap labour with factory laws often in breach, and with the benefit of power and excise duty leakages readily available to those wanting to cheat.

It became quite impossible for the mill industry to compete in these circumstances, with powerlooms in their areas ofoperation, which account for the bulk of the cloth in the domestic market. Thus, we have now a situation whereby in the last 40 years, the loom capacity in the mill industry has shrunk, whereas in the powerloom sector, it has grown 100 times. However, powerlooms themselves are now under pressure because the consumer has started to demand sophisticated cloth which this sector is unable to provide. In the early stages, there was hardly any difference in technology between a loom in the decentralised sector and in the mill, but with the passage of time, technology has advanced to such an extent that powerlooms as installed in the decentralised sector, are pygmies when compared to modern high speed looms, in terms of quality and productivity.

Exports from powerlooms became increasingly difficult for this reason.

There are other changes which have also come about affecting the offtake of fabric. Viscose rayon was introduced as a substitute for cotton but it caught on only partly.

There are certain areas inwhich rayon is popular and it is also mixed with cotton, but overall, it is not a substitute for cotton. It is polyester which has made the change. It is a strong fibre which when run on spindles and looms, gives almost 50 per cent higher output because of its strength.

(The author is adviser to Forbes Gokak Ltd)

(To be concluded next week)