International Journal of Comparative Economic Studies

Vol. 19, n.5, pp. 287-292

ISSN 1029-7737

Growth Trends in Cotton Textile Industry in India and Tamil Nadu

P. Mohanasundari B. Vanitha 1
Abstract
The cotton textile industry is one of the oldest industries and it generates largest
employment after agriculture and accounts for 38 per cent of countrys total exports. The
industry contributes nine per cent of GDP and 35 per cent of foreign exchange earnings.
After reforms it is claimed that the cotton textile industry has undergone tremendous
changes. In order to capture these changes an attempt is made in this paper to analyse the
trends in the structural characteristics of cotton textile industry at two-digit level in India and
Tamil Nadu during the pre and post-reform period. The study is based on secondary data
collected from Annual Survey of Industries Published by Central Statistical Organization,
Government of India for the period 1981-82 to 2010-11. Compound growth rate, linear
growth rate and coefficient of variation were appropriately used for analysis. The results of
the study that the fixed capital had registered the highest growth rate followed by gross value
added in overall period, wages to workers and total emoluments had increased at moderate
rate in overall period in both all India and Tamil Nadu.
Key Words: Cotton Textile, Growth Trend
Introduction
The cotton textile industry is one of
the oldest and most firmly established major
large scale industries in the world. The
cotton textile industry may be considered as
the real swadeshi industry of India built
under Indian management and sacrifice. It
generates employment after agriculture and
accounts for 38 per cent of countrys total
exports. This industry contributes nine per
cent of GDP and 35 per cent of foreign
exchange earnings. The annual values of
cotton mill production are more than 30 per
cent of value of the countrys industrial
output. An important section of the
countrys
farming
population
finds
employment in the production of cotton or
white gold, the industrys basic raw
material. The processing of cotton into
finished products is the major source of
employment to a large section of the people.
Objective of the Study
The main objective of this paper is
to analyse the trends in the structural

characteristics of cotton textile industry (at

two-digit level) in India and Tamil Nadu
during the pre and post-reform period as
well as overall period between 1981-2011.
Methodology
This paper is based on secondary
data collected from Annual Survey of
Industries Published by Central Statistical
Organization, Government of India for the
period from 1981-82 to 2010-11. Data on
other informations like whole sale price
index and consumer price index were
collected from RBIs monthly bulletins and
Economic
Survey
Published
by
Government of India, Ministry of Finance
and Economic Division, New Delhi.
Results and Discussion
Table 1 presents the indices of
various structural characteristics of cotton
textile industry at two-digit level of
National Industrial Classification (NIC)
code in India during the pre and postreform period (1981-82 to 2010-11).
During the pre-reform period, the index of

Assistant Professor in Economics, Bharathiyar Arts and Science College (Women), Deviyakurichi, Salem,
Tamil Nadu, India. Email: sundari.mogana@gmail.com
1 Professor, Department of Economics, Bharathiyar University, Coimbatore, Tamil Nadu, India.

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IJCES, Vol. 19, n.5 (2016)

Table 1: Structural Characteristics of Cotton Textile Industry in India

Year
Index of
Index
Index
Index Index of Index of
Index of
Index of
Number
of
of
of Net Number Wages Number of
Total
of
Fixed
Gross
Value
of
to
Employees Emoluments
Factories Capital Value Added Workers Workers
Added
1981-82
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
1982-83
87.03
127.73
101.13
105.69
104.69
109.96
102.74
99.69
1983-84
90.70
149.73
119.36
133.77
102.16
121.36
95.34
107.96
1984-85
90.51
143.56
112.18
138.22
102.24
118.49
83.82
109.52
1985-86
92.54
146.38
108.18
141.33
92.65
109.48
71.42
112.33
1986-87
90.41
157.31
121.58
170.11
92.57
123.56
72.03
125.68
1987-88
94.13
162.07
113.23
192.70
91.93
115.61
64.09
118.89
1988-89
94.05
159.54
117.49
218.03
88.75
114.08
55.87
115.53
1989-90
97.83
183.97
158.66
261.75
94.74
124.52
56.54
127.87
1990-91
101.98
198.45
167.15
246.53
93.15
124.04
49.17
126.23
1991-92
103.14
222.39
158.44
317.33
89.69
172.80
45.52
128.18
CGR (Pre)
1.01
7.27
4.94
11.92
-1.38
3.02
-8.16
2.63
1992-93
116.61
278.19
175.85
339.49
93.22
141.28
46.58
144.89
1993-94
127.15
322.24
224.33
367.09
97.62
133.24
42.40
141.45
1994-95
128.63
345.17
219.36
426.21
99.71
119.54
34.92
127.87
1995-96
137.21
430.11
198.43
425.72
111.97
138.22
35.62
144.34
1996-97
136.61
484.17
220.06
589.34
108.72
134.00
33.45
142.78
1997-98
135.78
532.69
220.54
516.02
110.45
137.55
31.83
148.95
1998-99
140.49
523.07
220.28
594.15
104.47
122.99
43.66
171.35
1999-00
144.53
872.85
318.41
878.35
104.97
180.36
58.79
255.82
2000-01
143.54
835.26
327.85
792.35
106.56
187.36
54.41
261.51
2001-02
134.02
747.89
288.77
922.16
98.13
176.25
54.46
253.32
2002-03
133.66
748.76
317.19
960.28
98.99
183.05
54.01
222.09
2003-04
134.65
726.57
307.92
895.94
103.03
175.57
50.03
263.23
2004-05
139.45
787.91
347.00
891.20
111.82
190.71
47.70
275.25
2005-06
156.89
931.62
507.31
952.04
104.76
253.45
50.42
343.79
2006-07
161.61
972.56
557.66
941.80
105.19
269.92
50.65
372.91
2007-08
166.57
993.61
620.02
962.33
105.55
290.80
51.46
409.06
2008-09
171.78
1051.87 683.38 1052.02
105.91
310.44
59.25
456.28
2009-10
185.67
1121.34 689.79 1142.26
118.91
324.56
62.34
472.13
2010-11
192.78
1165.28 715.89 1030.83
134.76
350.71
69.72
498.39
CGR (Post)
1.02
7.67
8.33
6.61
0.82
6.07
2.93
8.28
Overall CGR
2.61
9.37
7.20
9.24
0.63
3.82
-1.41
5.77
*
*
*
*
*
*
*
3.26
30.09
19.81
39.31
0.67
7.01
-1.03
12.57*
Linear Slope
(16.11)
(19.68) (11.98) (22.78)
(4.20)
(9.01)
(-2.99)
(10.88)
C. V
0.23
0.68
0.67
0.63
0.09
0.41
0.32
0.57
Notes: 1. Figures in parentheses are the respectivet values.
2.* Indicates one percent level of significance

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Growth Trends in Cotton Textile Industry in India and Tamil Nadu

number of factories indicated a mild

increase from 100.00 in 1981-82 to 103.14
in 1991-92 with compound growth rate of
1.01. In post-reform period it had increased
from 116.61 in 1992-93 to 192.78 in 201011 with compound growth rate of 1.02 and
the overall compound growth rate was
2.61.The coefficient of variation was found
to be 0.23.
The index of fixed capital invested in
cotton textile industry had registered a
positive compound growth rate for all the
three periods i.e., pre-reform (7.27), postreform (7.67) and also the reference period
(9.37) with coefficient of variation 0.68.
The index of gross value added had
shown a positive compound growth rate for
all the three periods viz., pre-reform (4.94),
post-reform (8.33) and overall study period
(7.20). In fact, in the post-reform period
growth in gross value added had doubled.
The coefficient of variation was found to be
0.67.
The index of net valued added in
cotton textile industry rose from 100.00 in
1981-82 to 317.33 in 1991-92 with
compound growth rate of 11.92 during the
pre-reform period. The post-reform period
witnessed an increase in net value added
from 339.49 in 1992-93 to 1030.83 in 201011 with compound growth rate of 6.61. The
overall compound growth rate was 9.24 and
the coefficient of variation was found to be
0.63. During the pre-reform period, the
index of number of workers employed in
cotton textile industry had registered a
negative compound growth rate (-1.38),
while in the post-reform period (0.82) and
the entire study period (0.63) it had
registered a positive compound growth rate
with coefficient of variation 0.09.
The index of wages paid to workers
had increased from 100.00 in 1981-82 to
172.80 in 1991-92 with the compound
growth rate of 3.02 during the pre-reform
period. In post-reform period it had
increased from 141.28 in 1992-93 to 310.44
in 2008-09 with compound growth rate of

5.69. The compound growth rate was 3.45

during the reference period. The coefficient
of variation was found to be 0.35.
In case of the index of number of
employees employed in the cotton textile
industry, it had registered a negative
compound growth rate in pre-reform (8.16) and the overall study period (-1.41),
while in the post-reform period it had
shown a positive compound growth rate of
2.93. The coefficient of variation was
found to be 0.32.
The index of total emoluments paid
had increased from 100.00 in 1981-82 to
128.18 in 1991-92 with the compound
growth rate of 2.63 in the pre-reform
period. In the post-reform period it had
grown from 144.89 in 1992-93 to 498.39 in
2010-11 with the compound growth rate of
8.28. The overall compound growth rate
was 5.77. The coefficient of variation was
found to be 0.57. The linear growth rate
was significant at one per cent level for all
the indicators. Among all the indicators,
the index of net value added had registered
higher linear growth rate (39.31) followed
by the index of fixed capital (30.09).
Table 2 shows the indices of various
structural characteristics of cotton textile
industry (at two-digit level) in Tamil Nadu
during the pre and post-reform period
(1981-82 to 2010-11).
During the pre-reform period the
index of number of factories had increased
from 100.00 in 1981-82 to 154.77 in 199192 with compound growth rate of 3.82. In
the post-reform period it had increased
from 218.68 in 1992-93 to 636.90 in 201011 with compound growth rate of 6.28 and
the overall compound growth rate was
6.30. The coefficient of variation was
found to be 0.61.
The index of fixed capital invested in
cotton textile industry had registered a
positive compound growth rate during the
pre-reform (7.61), post-reform (7.22) and
the entire study period (9.75). The
coefficient of variation was found to be
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Table 2: Structural Characteristics of Cotton Textile Industry in Tamil Nadu

Year
Index of Index
Index
Index Index of Index of
Index of
Index of
Number
of
of
of Net Number Wages Number of
Total
of
Fixed
Gross
Value
of
to
Employees Emoluments
Factories Capital Value Added Workers Workers
Added
1981-82
100.00
100.00
100.00 100.00
100.00
100.00
100.00
100.00
1982-83
100.45
121.12
109.45
99.52
98.19
107.87
99.36
98.67
1983-84
106.24
129.04
127.17 104.11
101.52
113.39
94.95
102.00
1984-85
126.50
134.98
127.56 111.22
110.33
114.17
90.47
99.33
1985-86
116.10
141.25
134.25 115.45
109.02
107.87
83.89
108.00
1986-87
116.24
149.50
148.82 123.87
105.53
124.41
82.15
124.00
1987-88
120.94
148.84
181.89 105.79
116.22
139.37
80.78
138.67
1988-89
119.67
172.94
187.01 118.21
116.83
148.82
74.29
148.00
1989-90
131.48
163.04
190.55 153.28
124.14
145.67
71.89
148.00
1990-91
141.47
215.84
184.65 159.68
131.08
146.46
65.58
148.67
1991-92
154.77
246.53
179.13 162.74
138.99
162.99
68.29
163.33
CGR (Pre)
3.82
7.61
6.85
5.15
3.31
4.84
-4.30
5.85
1992-93
218.68
310.23
217.72 145.44
165.32
198.43
65.27
182.67
1993-94
207.87
363.04
405.91 158.03
165.29
196.06
60.68
172.67
1994-95
226.87
403.63
383.46 167.59
177.56
191.34
57.88
172.67
1995-96
229.31
502.97
336.22 164.47
179.33
207.87
56.27
177.33
1996-97
227.27
552.81
426.38 172.58
189.74
224.41
55.47
194.67
1997-98
238.85
591.42
388.58 175.02
206.58
225.20
55.23
192.67
1998-99
250.75
601.98
308.66 192.54
184.93
199.21
58.89
235.33
1999-00
266.62
693.4
563.39 200.88
203.35
274.02
59.56
337.33
2000-01
282.09
699.44
659.06 212.19
219.23
306.30
62.68
371.33
2001-02
242.29
751.49
517.32 215.31
200.15
270.87
68.05
443.33
2002-03
256.45
806.27
624.41 217.20
206.67
289.76
60.72
404.00
2003-04
278.52
879.54
548.03 223.29
228.44
292.91
58.80
422.67
2004-05
285.12
902.64
769.69 243.04
251.50
325.98
61.55
420.67
2005-06
321.35
913.86
875.98 254.11
394.48
405.51
69.25
478.00
2006-07
412.26
964.36
889.76 261.76
438.06
437.80
76.02
517.33
2007-08
492.09
982.48
946.46 275.74
552.05
478.74
85.44
610.00
2008-09
622.84
1049.17 1005.12 276.68
701.89
532.28
96.65
706.67
2009-10
634.12
1156.89 1008.21 289.60
723.09
564.86
98.33
710.21
2010-11
636.90
1376.53 1142.34 290.37
735.91
569.02
99.37
723.41
CGR (Post)
6.28
7.22
8.16
3.97
9.07
6.77
2.90
9.51
Overall CGR
6.30
9.75
8.98
3.93
6.72
6.13
-0.41
7.68
15.80*
41.27*
34.71*
6.82*
17.76*
15.03*
-0.29NS
21.26*
Linear Slope
(10.01)
(24.18) (15.85) (28.68)
(7.54)
(13.40)
(-0.89)
(13.03)
C. V
0.61
0.68
0.70
0.33
0.77
0.56
0.20
0.68
Notes: 1. Figures in parentheses are the respective t values.
2. * Indicates one percent level of significance
3. NS Indicates non-significant
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Growth Trends in Cotton Textile Industry in India and Tamil Nadu

0.68. As for as the index of gross valued

added was concerned it had increased from
100.00 in 1981-82 to 179.13 in 1991-92 with
compound growth rate of 6.85 during the
pre-reform period. In post-reform period it
had increased from 217.72 in 1992-93 to
1142.34 in 2010-11 with compound growth
rate of 8.16. The overall compound growth
rate was 8.98 and the coefficient of variation
was found to be 0.70.
The index of net value added in
cotton textile industry had registered a
positive compound growth rate in prereform (5.15), post-reform (3.97) and as well
as the overall study period (3.93). The
coefficient of variation was found to 0.33.
In the pre-reform period, the index of
number of workers employed in cotton
textile industry had increased from 100.00 in
1981-82 to 138.99 in 1991-92 with
compound growth rate of 3.31. During the
post-reform period it had increased from
165.32in 1992-93 to 735.91 in 2010-11 with
compound growth rate of 9.07. The overall
compound growth rate was 6.72 with
coefficient of variation 0.77.
The index of wages paid to workers in
the cotton textile industry in Tamil Nadu
had recorded a positive compound growth
rate during the pre, post and overall periods
i.e., 4.84, 6.77 and 6.13 respectively. The
coefficient of variation was 0.56.
The index of number of employees
employed in the cotton textile industry had
indicated a negative compound growth rate
in pre-reform period (-4.30) and the study
referred period (-0.41), while the postreform period had registered a positive
compound growth of 2.90 and the
coefficient of variation was found to be
0.20. During the pre-reform period the
index of total emoluments had grown from
100.00 in 1981-82 to 163.33 in 1991-92
with compound growth rate of 5.85. In
post-reform period, it had increased from
182.67 in 1992-93 to 723.41 in 2010-11
with compound growth rate of 9.51. The
overall period had registered a compound

growth rate of 7.68 and the coefficient of

variation was found to be 0.68.
The linear growth rate was significant
at one per cent level of significance for all
the indicators. The high linear growth rate
was registered the index of fixed capital
invested (41.27) followed by the index of
gross value added (34.7).
Major Findings of the Study
1. Growth in the structural characteristics
of the cotton textile industry in India
reveals that in terms of gross value
added, wages to workers, number of
employees employed and emoluments
paid to employees were found better in
the post-reform period. In terms of
number of factories and fixed capital
invested in cotton textile industry at all
India level did not show any variation in
the pre and post-reform periods.
2. Growth in structural characteristics of
cotton textile industry in Tamil Nadu
reveals that the industry has performed
better in post-reform period in terms of
the indicators viz., number of factories,
gross value added, number of workers
and total employees as well as wages
paid to workers and total emoluments,
as the compound growth rate of these
indicators in post-reform period were
higher when compared to compound
growth rate in the pre-reform period.
However, in terms of net value added,
the growth performance of the industry
was found better in the pre-reform
period when compared to post-reform
period, while no such change was
observed in the investment of fixed
capital as the compound growth rate
was around 7.5 in both the periods.
Conclusion
The cotton textile industry is one of
the largest industries of the world. In India
and Tamil Nadu cotton textile industry at
the two-digit level, fixed capital followed by
gross value added and total emoluments
was increasing at maximum extent, while as
the number of employees had shown a
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International Journal of Comparative Economic Studies

IJCES, Vol. 19, n.5 (2016)

negative compound growth rate. The study

out that there is need of maximum attention
towards the growth of all these indicators
which had shown a least or negative
compound growth rate during the entire
period both at all India and Tamil Nadu.
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textile
industry:
International
Competitiveness, The University of
Nottingham.
2. Hildegunn Kyvik Nordas (2004),
Global Textile and Clothing Industry

Post the Agreement on Textiles and

Clothing, World Trade Organization.
3. Kunal Gaurav and Lokinder Kumar
Tyagi (2009), Indian Cotton Textile
Industry: A Pre- and Post-Liberalization
Comparative Study, The Indian
Journal of Management, 2 (2) 24-30.
4. Marimuthu
(2010),
Financial
Performance of Textile Industry, A
Study on Listed Companies of Tamil
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Research in Management, Economics
and Commerce, 2 (11) 365-377.

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International Journal of Comparative Economic Studies