Coimbatore has come out of the red and its economy is on the upswing after facing a lean period from 1995 to 1999 due to recession, distorted tax policies and serial bomb blasts of 1998.
D. Balasundaram, Managing Director, CPC (P) Limited, maintaining textile industry being cornerstone of economy, said its performance registered a sharp decline from 1994 due to recession and its inability to withstand international export competition.
Anti-muslim violence of December 1997 and subsequent serial bomb blasts in the city in February 1998 targeted major business establishments, retail trade and petty trade on pavements, Balasundaram said.
Political uncertainty at the Centre in 1996, 1997 and 1998 made matters worse as initiatives could not be taken to strengthen textile and engineering industries facing economic instability.
Taxation policies for textile products changed after A.B.Vajpayee came to power in October 1999.
Technology Upgradation Fund Scheme (TUFS) was introduced in order to help modernise and expand the textile industry. A 10 per cent capital subsidy on the cost of certain machines used in the processing industry, considering the exorbitant cost of such machines, had a beneficial effect on the textile industry.
World Trade Organisation introduced quota-free regime for textiles that became effective from January 2005, said Balasundaram, and the textile sector has been procuring orders from leading retailers of the world, especially from US and the Europe. Today, dyed cotton yarn in Sethumadai near Pollachi, Coimbatore district is sold at attractive price in the domestic market.
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