The government has decided to review the ban on cotton exports, announced on Monday, as agriculture minister Sharad Pawar has raised strong objections.
Textiles secretary Kiran Dhingra told journalists on Tuesday that the decision would be reviewed on March 9 by a group of ministers, who apart from the commerce minister, include Pawar and the finance minister.
The decision to impose the ban on exports was taken by the commerce minister on the recommendations of the committee of secretaries (CoS), which includes the commerce secretary, the textiles secretary and the agriculture secretary.
Dhingra said that since the commerce minister was going on a four-day foreign tour and there was a sudden surge in cotton exports, the ban had been put in place to check the stocks with textile mills falling further. "Currently, textile mills are carrying their lowest stocks ever in the past decade. Given the tight liquidity position in industry, it is not possible for them to procure larger quantities to cover their future requirement at this stage," she said.
Pawar, who positions himself as a farm leader, has dashed off a letter to the Prime Minister to protest against the decision.
Pawar said he has sought Prime Minister Manmohan Singh's intervention in the matter and demanded an immediate lifting of the ban. "They kept me in the dark. I came to know about this only after a notification was issued by DGFT," Pawar told reporters on the sidelines of an ICAR function.
Complaining that the decision was taken without proper consultations, Pawar said, "While taking such a decision, it is always proper to discuss it in the Cabinet Committee on Prices or in Cabinet Committee on Economic Affairs as is done with wheat, rice and sugar. So, I have raised this issue with the Prime Minister. This is highly objectionable."
The Directorate General of Foreign Trade (DGFT) comes under the commerce ministry, headed by Congress leader Anand Sharma, who also holds the charge of the textile ministry.
Pawar added that cotton growers in Gujarat, Andhra Pradesh and Madhya Pradesh are in serious trouble as traders have stopped buying cotton after the ban on exports.
Gujarat chief minister Narendra Modi had also taken strong objection to the Centre's decision to ban cotton exports and had shot off a letter to Singh on Monday demanding lifting of the ban.
With the Congress faring poorly in the Assembly elections in the five states, the UPA government cannot afford to be seen as anti-farmer in its policies. While the ban protects the interest of industry, it has also led to a decline in prices of cotton, which directly impacts incomes of farmers.
However, Dhingra said that with only 25 per cent of cotton likely to arrive in the markets during the current season, the scenario pointed to a shortage of cotton for the indigenous industry, huge rise in domestic prices of cotton and inability of textile mills to build up carryover stocks for the 2012-13 cotton year.
She said that the textiles policy cleared by the GoM in 2010 had laid down that a carry- forward balance of 50 lakh bales should be maintained and only surplus cotton should be exported. Exports at 94 lakh bales have brought down the carry- over stocks to 36 lakh bales, she added.
Courtesy: Mail Today