Indian state Punjab and Haryana facing major challenges in the textile sector which has arise due to non-functioning of many textile factories, causing job loss, primarily due to low productivity, lack of foreign investments and labour issues during 2000-01 and 2010-11, according to a study conducted by the Associated Chambers of Commerce and Industry of India (Assocham).

Clocking a compounded annual growth rate (CAGR) of about 35 per cent, the number of non-operating textiles units in Punjab grew from 11 to 227 units between 2000-01 and 2010-11, said a study

The number of jobs lost due to non-operation of textile factories in Punjab has grown at a CAGR of 41 per cent during the period as the state has suffered a loss of about 32,600 employment opportunities in 2010-11 as against about 1,000 in 2000-01, the study, state-wise assessment of textile sector & recommendations, said.

Similarly, in Haryana, non-operating textile factories grew from 11 to 175 during the period, thereby clocking a CAGR of 32 per cent, and the state suffered a loss of 14,300 job opportunities in 2010-11 against 675 jobs lost in 2000-01.

The number of jobs lost due to non-operation of textile units in Haryana grew at about 36 per cent CAGR, it added.

The total number of textile factories in Punjab increased from 635 to 929 during the aforesaid period, however, the number of textile units in operation increased from 624 to 702. While in Haryana, the total number of textile factories increased from 455 to 630 and the number of textile factories in operation increased from 444 to 455.

Punjab has suffered marginal decline in the share of textile factories under operation across the country from 5.93 per cent in 2000-01 to 5.53 per cent in 2010-11 and even in Haryana the share of operating textile factories decreased from 4.22 per cent to 3.59 per cent.

According to D S Rawat, national secretary general, Assocham, low productivity, lack of advanced manufacturing technologies, foreign investments, economies of scale, labour related challenges, issues arising due to a fragmented industry, supply chain bottlenecks and weak brand positioning are certain key reasons for non-operation of textile units. Increased domestic and global competition and high initial investment cost for state-of-the-art production facilities are the other emerging challenges being faced by the Indian textile industry.

The study has listed certain key suggestions to make the textile industry financially viable, thereby minimizing the share of non-operational factories are technology and skill upgradation, inflow of foreign investments, brand promotion, and flexible labour policy.