The Hindu Business Line : Kerala Coir body feels VAT is detrimental to it

LACK of regular supply of good quality coir fibre is a major problem faced by the coir industry in Kerala and several measures announced by the State and Central Governments have not yielded the desired results, according to Mr T.A. Kaleelur Rahman, President, Cochin Coir Merchants Association (CCMA).

Addressing the Association's 62nd annual session here Mr Rahman said before the introduction of the Kerala Husk Control Order in 1973, there existed a chain mechanism for collection and supply of green husks from households to retting centres.

"In fact, the present shortage is not entirely due to the fall in coconut production". As per available estimates, coconut production in the State during 2002-03 was of the order of 5,338 million nuts.

Mr Rahman also expressed the apprehension that if VAT were made applicable to the coir sector, it would prove to be detrimental to the industry and trade.

According to him several establishments dealing in coir yarn and coir products may be forced to close down or restrict their operations in the State.

Domestic consumption would come down sharply forcing several self-employed households engaged in spinning and production of handloom mats would be thrown out of their only source of income.

He said the consequential impact of such a situation on the rural economy would be rather grave. Crores of rupees allotted by the State and Central Governments to safeguard and protect this industry would go astray, he claimed.

"Out of the total cost of coir yarn, wages alone constitute about 50 per cent and in the case of products, it may be around 75 per cent of the total value or cost. The major chunk of wages goes to the labourers in rural areas," he said.

He urged the State Government to give due consideration to these aspects and "take appropriate steps to see that the coir sector is completely exempted from the purview of the VAT on the anvil".

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