``The textile industry is interacting with the finance ministry to evolve a VRS package as close to Gujarat pattern as possible,'' Ghosh told Economic Editors' Conference here. A mill-wise study carried out on the 119 ailing NTC mills by textile research units showed that 34 mills could be made viable and positive networth achieved within 10 years, he said.

A VRS package of 35 days wages, 25 for service already rendered by a worker and 10 days for the number of years' service remaining, was formulated by the Gujarat government recently for rehabilitating sick state textile units.

Ghosh, however, made it clear that Board for Industrial and Financial Reconstruction (BIFR) has to be satisfied with the package as all NTC units arewithin its purview. The issue of labour in the NTC units could be justifiably settled if the VRS package succeeded, Ghosh added. Ghosh said it might be difficult for the government to implement the VRS package at one stroke because of the huge financial implications involved and `some phasing might be needed.'

Earlier turnaround attempts by government to rehabilitate sick mills, including the one made in 1992 and subsequently in 1995 through sale of surplus land, largely failed due to various hurdles coming in the way. For instance, prospect of selling surplus land in Maharashtra was not found attractive because of local land laws. ``The government would have fetched around Rs 1800 crore for the NTC land in Maharashtra. But as per local regulations, two-thirds of the sale proceeds would have gone to the Mumbai Municipal Corporation and Mumbai Municipal Development Authority,'' Ghosh said. With the rest of the amount, it would not have been possible to pay the labour also, he said, adding ``we had soughtexemption from the regulations.'' Despite difficult export situation, export of garments, which contributes nearly 30 per cent of the total textile exports, recorded a growth of 9.1 per cent in dollar terms in April-August 1998, he said.

In the first quarter of 1998, export of textiles had declined by 5.9 per cent in dollar terms. The export decline was prominent in cotton yarn and it had largely been due to steep fall in exports to South East and East Asian countries which account for over 60 per cent of India's exports of cotton yarn. In April-August this year, exports of cotton yarn declined by minus 18 per cent, though there were some encouraging signals in the month of August, Ghosh said.

The decline in exports was also noticed in cotton fabrics and made-ups as well as carpet and floor coverings owing to stiff competition from South East Asian countries and China. He also referred to the frequent anti-dumping actions initiated by the EU, which was paradoxical in a quota regime. Trade represe-ntatives of EU countries have decided against imposing definitive anti-dumping duty on unbleached cotton grey fabrics.