MUMBAI (Commoditiescontrol) – Textile production, as indicated by the Index of Industrial Production, released by the Central Statistics Office of the Ministry of Statistics and Programme Implementation, was up 2.9 per cent (YoY) in November 2016, when the high value currency notes were defunct by the government. While textile products output rose 3.9 per cent, apparel production inched up 0.9 per cent during the month. However, these increases have come from the decline of 3.5 per cent and 2.2 per cent posted in November 2015. Hence, it implies that the demonetization impact was largely neutral, prima facie.
Textile production is largely organized as close to 80 per cent is from corporates while the rest is produced by the households. Thus, the impact of demonetization was negligible on textile production. Yarn production data released by the Textile Commissioner Office also corroborates with the IIP estimates which pegged yarn production up 2 per cent during November.
Although a large portion of textiles remain in the organized domain, all related services like transport and majorly the raw material supply is largely unorganized, which have been severely affected by the demonetization policy. Farmers were and are still reluctant to sell their produce without cash while ginners are holding back stock in anticipation of higher prices during the lean season. Cotton based textile production will start feeling the heat sooner or later and may also face higher raw material cost.
(By Commoditiescontrol Bureau; +91-22-40015522)