The Textile Policy is very much in line with its recently announced action-less trade policy. "Here the efforts will have to focus on fashion and design and branding", "entrepreneurs will be encouraged", "government will endeavour", "steps will be taken", "facilities will be provided", "legal framework will be developed", "extensive exercise will be undertaken" for removing regulatory bottlenecks," will introduce an insurance scheme" - are just a few examples of how little effort was made in drafting the policy which did not identify any substantial solutions.
The long-delayed, difficulty-read out speech promised a lot by presenting a mishmash of ideas that will cost the country billions but will deliver little owing to a lack of cohesion and absence of a clear-cut direction. For instance, consider the following allocations: Rs 1.6 billion for technological up gradation, Rs 1 billion for infrastructural development, Rs 1 billion for skills development, Rs 2 billion for export housing scheme. They all have one thing in common: no cut-offs, no criteria and no way forward.
On top of this, the policy failed to give any sort of tangible step, such as market-based signal or government aided measures, to resolve the root problems faced by the industry such as energy deficit, dearth of value addition and sector consolidation. At the most, it contained the rhetoric that the government will do. What will it do, would perhaps take another unnecessarily touted policy.
Likewise the minister didn't talk about how to arrest the flight of human and financial capital from domestic textile industry towards more lucrative markets in the region such as Bangladesh. Even the LTTF facility has little to offer as ballpark calculation shows that it would ease interest payment on total industry debts only by 6 to 7 percent.
Besides, the ministry should have pegged these relief measures with performance, given that historically many textile makers used such funds for all sorts of other investment avenues other than their main business. Similarly, the allocation of export refinancing schemes (Rs 2.5 billion) is just peanuts given the quantum of our exports.
Given these abnormalities, the target to increase textile exports to $25 billion by 2014 and the aim to double value-added items look rather ostentatious. The government should rather take concrete steps to work on consolidation of the industry - the root cause of our textile industry slackness. More on policy framework later on BR research section.