The New Textile Policy THE cotton textile industry in India has been facing a crisis since the mid-sixties which became very severe around late 1974 leading to large scale ^sickness'9 among textile mills. Per capita consumption of cloth in linear metres which had reached a peak in 1964 has stagnated since then and from the early 70's it is in fact declining. At the same time, costs of production especially of raw cotton have risen very sharply while the prices of cotton manufactures have risen much less which on the whole has resulted in a decline in the average level of profitability for the industry. While this has to be seen in the context of the developing recessionary crisis in the economy since the mid-sixties there has been a trend both in government and industry circles towards emphasising the need for a comprehensive textile policy which could resolve the crisis of demand and profitability in the industry. The much awaited policy was announced on August 7, 1978 and as is often the case with long awaited official policies, hardly anything new can be gleaned from it. It emphasises that ^the absence ofclearcut and unambiguous policies relating to the various facets of this diverse industry and the failure to set definite time bound objectives" have been largely responsible for the unhappy situation in the textile industry. Once again therefore the objectives of providing cheaper cloth of good quality to the consumer, cheaper raw material to the industry and a rapid development of the decentralised sector are reiterated. That the policy would contain such a narrative was well known. However, one aspect of the policy regarding which some uncertainty had still existed and which was a major issue on which an announcement was awaited was the controlled cloth obligation, the final decision on which has surpassed all expectations of the industry itself. The core of the policy relates to the scheme for controlled cloth production. The fact that the quantum of cloth to be produced by the private mill sector has been virtually reduced to zero shows very clearly that the government has finally yielded to the pressures from the stronger sections within the industry, which had existed right from the initiation of the controlled cloth scheme itself.