According to Nandan Damani, the outgoing president of the MOA, further delays and red-tapism will lead to closure of the existing mills threreby causing law and order problems to the state.

Damani, who handed over the charge of presidentship to HM Shah of Ruby Mills, said that the state government imposed a ban on development of mill land including construction for its own use in February 1996 when it appointed a study group headed by Charles Correa for evolving plans for integrated development of mills land. Though the committee submitted its recommendations to the state government long ago, the matter has beenhanging fire for over three years, "despite protracted dialogues with the industry, labour and other related interest groups."

The state government, bowing to pressure from BIFR, has cleared the sale of surplus land by Khatau Mills, Modern Mills, Matulya Mills, New Great Eastern and Sriram Mills. But the government is yet to give the go-ahead to similar proposals by private mills which includes Ruby Mills (pending since January 17, 1992), Piramal Mills (February 23, 1993), Hindustan Mills (June 6, 1994), Victoria Mills (September 23, 1994), Simplex Mills headed by Damani (December 8, 1994), Bombay Dyeing - Spring unit (March 22, 1995), Morarjee Goculdas Mills - unit I (June 7, 1996) and Morarjee Goculdas Mills - unit II (July 31, 1996).

Damani said that colossal evasion of duties on powerloom cloth at the processing stage has been the single most important factor which has been responsible for the downfall of the high-profile composite mill industry. The ministry of finance had acknowledged the evasion ofduties to the tune of Rs 2,000 crore per annum which has now mounted to Rs 3,900 crore.

Damani said that another gateway to evasion of duties was the permission given to hand-processors to use certain critical machines operated on power. "While genuine hand-processors deserve duty exemption, permission to work on certain machines operated on power by hand-processing sector merits immediate withdrawal," he added. He stressed the need for a relook at the "current ratio norm applied for the textile industry as the continued uneconomic working has landed the industry in severe liquidity crisis.