Guntur
Spinningmills in the state are facing a severe financial crisis due to increase in cost of production caused by the high power tariff due to true-up charges, increase in electricity duty from 6 paise a unit to Rs 1 per unit by the power distribution companies, labour costs, cotton prices and policies of the government.
There are 120 spinning mills in the state providing direct and indirect employment to two lakh people. Almost all of them are facing severe financial crises.
The state government has to release Rs 900 crore power and other subsidies to the spinning mills but due to the financial crisis, these have not been released. Due to the crisis, the spinning mills have reduced cotton spindle production from 35 lakh spindles per day to 25 lakh spindles.
If the same situation continues, some spinning mills are likely to reduce production further and some likely to close.
When the cost of production is increased, the spinning mills are unable to sell cotton spindles at viable price in the market due to competition.
At present, a spinning mill on an average pays Rs 1 to Rs 1.5 crore power bills per month.
AP Textiles Association representatives met energy minister Gottipati Ravi Kumar and HRD minister Nara Lokesh and submitted a memorandum requesting release of power subsidy dues. Sources say despite it, there has been no response from the government.
AP Textile Mills Association president P Koti Rao said Telangana state government is giving Rs 2 power subsidy per unit to spinning mills. He requested the government to introduce a similar scheme in the AP also. Situation forced the spinning mills to reduce their production by one third. Out of 120 spinning mills, 33 mills have been closed while some others cut down on production.
