Thackersey said that the government, should react fast and should bring about an end to the mill land sale issue which has been hanging fire for over three years. The move will allow textile mills to raise the much- needed funds to upgrade the sector. The outgoing chairman Nandan Damani criticised the government's lethargy saying "their inefficiency is costing us dear and we are not being allowed to restructure our activities."

According to the new chairman Hiren Shah who is also the managing director of Ruby Mills, a combination of three factors viz rationalisation of fiscal levies, surplus land sale and Technology Upgradation Fund (TUF), would put back the ailing textile industry on track.

With a view toplug the excise duty evasion Rs 3,900 crore per year by the powerloom fabric processors, the government imposed excise duty at Rs 1.50 lakh per stentering machine chamber for independent processors.

According to the association, this would infact lead to drop in the collection and give unfair advantage to independent processors vis-a-vis the composite mills.

For example, the excise on blended dress materials by independent processors would be just 50 paise per metre as against Rs 3.20 per metre paid by the mills; in case of suitings it is Rs 2 per metre for independent processors and Rs 8.32 per metre for composite mills; for polyester cotton shirtings it is Rs 2.34 per metre for independent processors and Rs 7.26 per metre for mills and so on.

Hiren Shah is of the view that the excise duties should be made uniform to all.

The TUF launched by the government aims at giving finance to the mills at subsidised rate of interest. However, the banks and financial institutions would ask the mills tocontribute to the extent of 25-30 per cent.

The mills are in such a bad financial conditions that they will not be able to raise this amount on their own, opines Thackersey. They could, however, raise it through selling mill lands and the proceeds could be used for settlement of dues towards labour, outstanding loans and modernisation.

Hiren Shah is of the view that the composite mills can partially shift out of Mumbai by relocating the updated processing unit and retain spinning and weaving units in the city so as to not make the entire labour redundant.By 2005 when the quota regime ends, Indian textile sector needs to be competitive for which they need the world class processing facility. This can come up outside the city at much lower cost since land and labour would be available cheaper, says Hiren Shah.

"Banks and financial institutions have put textile industry on the credit watch and have decided not to increase their exposure to this sector considering it highly risk-oriented," says Thackersey.Citing example of his EOU in Karad which is a success, he opined that the government should allow mills to shift out of Mumbai by selling their land.