Spinning mills in Andhra Pradesh struggle as financial crisis deepens

The spinning mills in Andhra Pradesh are facing a severe financial crisis due to growing production costs. The crisis stems from increased power tariffs caused by true-up charges, a hike in electricity duty from 6 paise to Rs 1 per unit, rising labor costs, fluctuating cotton prices, and government policies.

The state’s 120 spinning mills, employing two lakh people directly and indirectly, have seen cotton spindle production drop from 35 lakh spindles daily to 25 lakh. If the situation persists, further production cuts and closures are inevitable. Currently, 33 mills have already shut down, and others have scaled back operations.

Each mill spends Rs 1-1.5 crore monthly on power bills. Compounding the issue, the state government has withheld Rs 900 crore in power and other subsidies due to its financial difficulties. The AP Textiles Association, led by President P Koti Rao, has urged the government to release the dues and introduce a Rs 2 power subsidy per unit, akin to Telangana’s support to its mills. Association representatives met with Energy Minister G Ravi Kumar and HRD Minister N Lokesh, submitting a memorandum. However, no response has been received, leaving the industry on the brink of collapse.