Coimbatore: South Indian Mills Association (SIMA) and the Indian Textile Industry Confederation (Citi) have thanked Minister M K Stalin to eliminate 1% Cess on cotton and cotton waste.
The decision will attract some private cotton traders and Indian cotton capacity to open depots in Tamil Nadu and sell cotton to a small scale spinning plant.
This will greatly reduce the terms of working capital and also costs, time and transportation.
Citi Chairman T Raj Kumar and Deputy Chairman of Sima Ravi Sam attended a joint press meeting held at Sima Conference Hall on Saturday.
“This will benefit the open spinning sector that accounts for 50% of state spinning capacity and will make them a source of all raw material requirements in a country that will increase SGST income substantially,” said Raj.
Global brands and retailers prefer and pay premiums for sustainable textile products produced from waste and therefore, Tamil Nadu will get good export opportunities, said Ravi.
The decision will soon benefit two Lakh cotton farmers, the representative said.
The state has been considered to increase cotton production from five lakh bales to 25 lakh bal in 2030.
It will encourage farmers to switch to cotton plants from other cash plants which will benefit 10 lakh farmers in the long run.
The Tamil Nadu Agriculture Market Committee began collecting 0.5% Cess in cotton waste and cotton from 1959.
It was upgraded to 1% from 1987.
There was no other country levy in cotton waste.
Tamil Nadu produces about five to six lakh bals (170kg / bale), but consumes 110 to 120 lakh bales per year.
The state is the remaining source of cotton from other countries and other countries by spending enormous transportation costs starting from Rs 2 to Rs 6 / kg.