Kadi, July 4 (KNN)  Being the ‘Cotton city’ of India, Kadi in Mehsana district of Gujarat, has more than 100 cotton mills in operation. But despite of the city having a legendary cotton ginning industry there have been numerous ginning industry accounts declared under stress by State Level Bankers’ Committee (SLBC), Gujarat.

All this, as per the SLBC report, has enormously increased the NPAs of nationalised banks in Gujarat.

As per the report, among all nationalised banks, Allahabad Bank has registered highest NPA of 22.96%, followed by Indian Overseas Bank with 21.73% and Andhra Bank with 18.17%. Bharatiya Mahila Bank has lowest NPA of 0.59% followed by Punjab and Sind Bank with 1.24%.

Gross NPA of State Bank of India group has reached 4.69% in Gujarat with gross NPA amount of Rs 4,261 crore.

It all points out to the fact that the cotton ginning industry and the associated MSMEs were the most affected ones in FY2015-16. As per the SLBC data, banks in the state extended advances worth Rs 4.31 lakh crore in FY16, of which over Rs 25,000 crore turned to NPAs by end of March 2016.

Talking to KNN about the current status of Gujarat based cotton ginning MSMEs, Dilit Patel , President  of  All Gujarat Cotton Ginners Association, said , “ The ginning industry  in  the state is operating at absolute disparity and is too overcrowded at the moment. There tends to be an ‘overcapacity’ which prevents even the legitimate players and industrialists earn sufficient returns on the installed capital.” 

“Gujarat has the production capacity of around 1 crore cotton bales but the ginning industry setup has the overcapacity to process more than 3 crore cotton bales. This has left many MSME units in lurch thus forcing them to go out of operation.

This also hits   SMEs hard through the stiff competition to take over the limited cotton production so as to keep their units running. Now , all this happening around the length and breadth of Gujarat has not only  left the MSMEs out of business but has also led their bank accounts feel the similar stress, turning them into NPAs ultimately,” Patel  who is also partner at the Raja Ginning Industries opined.

“The Cotton Ginning Industry being overcrowded and the loss incurring sector should not be given any benefits by the government at the moment. This is because any such benefits will only help the NPA culprits to continue their business and further aggravate the problems and risks. All this further tends to over hurt the compliant industrialists who will be unable to make ample profitable returns if the loss making firms continue the business in the already overcrowded market,” he added.

Patel who is also an entrepreneur in the same sector stressed on reviving the spinning, weaving and garmenting industries more than the ginning industry stating “these are the sectors which require the services of the ginning industry”.

“If instead of exporting yarn, the garment industry within India is made capable enough to process the whole cotton ginning industry’s output then not only will it make Indian garment industry the most self-sufficient sector but will also help ginning industry recover indirectly”, Patel concluded.  (KNN/ GK)