Jan 29 : Despite a recent stinger from the Small Scale Spinning Mills, the Southern India Mills Association (Sima) has fired a fresh salvo to keep the issue of excise exemption given to the small spinners boiling. In its latest argument, Sima has called for withdrawal of the excise exemption enjoyed by the small scale spinners. Sima, claims the exemption has resulted in the loss of Rs 93 crore to the government, by way of excise revenue and labour deprived of Rs 80 crore wages.The big units have been fighting for withdrawal of the exciseexemption given to the SSI units, which they claim has put them at a disadvantage. The small spinners enjoy a direct benefit of 9.20 per cent by way of exemption.``On record 930 small units employ 30,000 workers. Whereas the 40 large scale mills, employ 22,000 workers who lost their jobs. The maximum average wage of a worker in SSI units is Rs 75 a day, whereas, in a large-scale unit it is Rs 150 a day. The present policy has only benefited 930 individual mill owners,'' the release from the Association states. uHowever, it is silent on whether the 40 mills had closed down, solely due to competition from the SSI units.
``Technologically small mills can not be set up, unless they resort to fragmentation, use old machines which cost a fraction of the new ones at the cost of efficiency or under-invoice old machines. With new machines, even 750 spindles will cost Rs one crore. There is also gross under-utilisation of preparatory machines, if the capacity is less than 6,000 spindles,'' the Association claims.
The turnover will be in excess of Rs one crore even with a 1,500 spindle capacity. There is large-scale evasion since the average size of the small spinning units is around 2,300 spindles, it points out. Sima feels that precedents such as withdrawal of similar exemption given earlier to the rexin and steel rolling industries, should be followed in the case of spinning mills too.
Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
