PERFORMANCE OF TEXTILE INDUSTRY IN INDUSTRIALISATION: A STUDY WITH REFERENCE TO INDIA

INTRODUCTION
Prosperity of any nation is extremely difficult without industrial development – is a well established truth for all the economies – developing or developed. Economic development and industrialization have became so closely integrated with each other that progress of an economy is now accessed from the success it has achieved in transformation from agricultural set up into a industrial set up. Through industrialization a situation is created whereby many industries are set up rapidly and ultimately backward areas are converted into economically developed areas and backward economies into developed economies. Industrialization, infact is a composite term which involves a number of structural changes such as changes in the production techniques, factor intensities, industrial employment and output.
Industrialization is not only a way to increase output or national income but is a means of introducing modern technology and changing ways of life and finally the structure of the economy because of its self-reinforcing quality. But the all above cannot be executed without a well planned industrial policy. The industrial polity provides direction to the pace of industrialization and industrial development. Hence, to industrialize the country, India too, framed industrial policy which was amended, modified and reoriented several times. The First Industrial Policy was framed in 1948, followed by the Industrial Policy Resolution of 1956. The Industrial Policy Resolution of 1956 gave direction to the development of industry till 1973 which resulted in sound base of industrial development in the country.
After 1973 the Industrial Policy was amended in 1977 with the objective of accelerating the pace of industrial growth, increasing productivity and income of industrial workers, promoting technological self reliance and increase in the level of employment. After 1977, several amendments were made in the industrial policy but the major landmark change came in 1991 when New Industrial Policy as part of New Economic Policy was introduced. The New Industrial Policy of 1991, infact, was a part of structural reforms introduced which was to change the entire outlook towards the industrial development so that Indian industry is made efficient as well as globally competitive. Under atmosphere of economic reforms, broad changes were introduced. 1

1 Thakur, Babita & Sharma, Vinod Kumar. (2012). “Had Economic Reforms had an Impact on India’s Industrial Sector?”, Journal Of Humanities And Social Science (JHSS) ISSN: 2279-0837, ISBN: 2279-0845. Volume 4, Issue 2 (Nov. - Dec. 2012), PP 01-07.
The major policy changes initiated in the industrial sector were:-abolition of Industrial licensing, monopolistic and restrictive Trade Practice limit, free entry to foreign investment and technology, industrial location policy liberalized, removal of mandatory convertible clause, free import of capital goods, deregulation in small scale industrial units. The main aim of this policy was to unshackle the country's indus¬trial economy from the cobwebs of unnecessary bureaucratic control, introduce liberalization with a view to integrate the Indian economy with the world economy.2
The textile sector accounting for a significant portion in industrialization of the country and plays a vital role in the nation’s economy, both in regard to employment generation and earning of foreign exchange. Textile is one of India’s oldest industries and has a formidable presence. This industry has witnessed a phenomenal growth during the last four decades.3
The report of Working Group constituted by the Planning Commission on boosting India’s manufacturing exports during 12th Five Year Plan (2012-17), envisages India’s exports of Textiles and Clothing at USD 64.11 billion by the end of March 2017. The textiles industry accounts for 14% of industrial production, which is 4% of GDP; employs 45 million people and accounts for nearly 11% share of the country’s total exports basket.4
HISTORY OF TEXTILE INDUSTRY IN INDIA
The history of India witnesses the glorious past of its textile industry. Many countries bought textile products from India for exchange of gold and silver. Textile was one of the principal commodities for which India enjoyed its trade at international platform. The inimitability of Indian textiles lies in its fine quality, vibrant colours, elaborate designs, natural sheen. Although India underwent many invasions, suffered slavery and revolution, India's textile proficiency was imitated in the West.5

2 ibid
3 Dhanabhakyam, M. & Shanti A. (2006). “Indian textile industry - An overview”, Department of Commerce, Bharathiar University, Coimbatore.
4 Government of India (2013). “Annual Report, 2012-13”, Ministry of Textiles. New Delhi, p.4 www.texim.nic.in

5 Sharma, Manisha & Prashant, Anu. (2009). “An Analysis of performance of Indian Textile Industry in quota free Regime”, Institute of Management Technology, retrieved on 24 July 2013, http://www.freepatentsonline.com/article/Paradigm/238426591.html

Prior to British rule in the eighteenth century, Indians had dominated the world textile trade. However, along with the Industrial Revolution, the advent of spindles, looms, and new spinning processes made better textile producers out of the British. In India, the textile industry evolved from being a mere domestic industry to a top notch national industry far before the Industrial Revolution. Thus, the traditional textile industry of India went under de-industrialization during British rule. Nonetheless, modernization of India's textile industry took place during the early 19th century; the first textile mill in the country was established at Fort Gloster near Calcutta in 1818.A few years later, the first cotton textile mill of Bombay was established in 1854 by a Parsi cotton merchant. In 1861, the first cotton mill in Ahmadabad was established in the Gujarat region. By the end of the 19th century, there were 178 cotton textile mills in India. The textile industry made rapid progress in the second half of the nineteenth century.6
Bombay continued to dominate the location patterns; its share in the consumption of cotton is definitely on the decline. While that of the rest of the Presidency including Ahmedabad, has increased considerably. After the Second World War, Swadeshi movement helped the industry to survive. Boycott of foreign goods created a great demand for Indian made goods in the home market. Hence, to serve the local markets many centers developed & old ones which were on or near cotton growing areas & in near proximity to transport arteries for example Kanpur in the north, Bangalore and Coimbatore in the south, Indore in the centre and Calcutta, in the east all showed significant growth. Consumption of the Bombay presidency also remained noteworthy. India achieved independence in 1947, so industries of 1960 had benefits of two plan periods. Compared to 1940, this stage showed a significant growth in terms of consumption of cotton at the major centers as well as at the states.7
Post-independence, till about the late 1980s, the Government of India put numerous policies and regulations in place to ensure that mechanization did not occur and that labour-intensive textiles were produced, large-scale production was discouraged by restrictions on total capacity and mechanization of mills. The labour regulations did not allow capital investment and resulted in high production costs. Imposition of price restrictions, along with decreased productivity, severely hampered the competitiveness of the sector..Till 1985, the main concerns of Government policies were centered on import substitution, protection of existing employment in the organized sector and support for decentralized sector. The textile industry had to be set free from these regulatory burdens so that it could evolve, grow and remain competitive in the global market.8
6 Jung, Jewon. (2008). “Industrialization in India from the late 1800s to 1947” Korean Minjok Leadership Academy, Term Paper ,AP World History Class, retrieved 28 July 2013 http://www.zum.de/whkmla/sp/0910/jjw/tumulus1.html
7 Shah, Jayalaxsmi J. “A comparative analysis 01 two major cotton textile centres of India-Bombay & Ahmedabad”, Department of Geography 8NDT Arts and 8CB Commerce College for Women-Bombay.
8 Zala Vikram S. (2010). “A study of productivity and financial efficiency of textile industry of India”, a thesis submitted for the degree of doctor of philosophy, Dept. of commerce, Saurashtra University, Gujarat.
TEXTILE IN INDIA’S INTERNATIONAL TRADE

Textile sector plays a crucial role in the foreign trade of India. The brief picture may be presented as follows:-
Exports in India increased to Rs. 1459280.51 crore during 2011-12(P) from Rs.1142921.92 crore in 2010-11. Exports in India are reported by the Directorate General of Commerce. India’s main exports are engineering goods (19 percent of total exports), gems and jewelry (15 percent), chemicals (13 percent), agricultural products (9 percent) and textiles (10.93 percent). India is also one of Asia’s largest refined product exporters with petroleum accounting for around 18 percent of total exports. India’s main export partners are United Arab Emirates (12 percent of total exports) and United States (11 percent).
Others include: China, Singapore, Hong Kong and Netherlands. The textile industry plays a significant role in total exports in India. During 2011-12 (P) export from textile industry were valued at Rs. 159570.56 crore as against Rs. 126281.18 crore during the corresponding period of financial year 2010-11. And share of textile in total export in India were 10.93% and growth of textile touched 26.36% in 2011-12 (P).
Imports in India increased to Rs.2345972.70 crore in 2011-12(P) from Rs.1683466.96 crore in 2010-11. Imports in India are reported by the Directorate General of Commerce. India is heavily dependent on coal and foreign oil imports for its energy needs. Other imported products include: machinery, textile, gems, fertilizers and chemicals. India’s main import partners are China (12 percent of total imports), United Arab Emirates, Switzerland, Saudi Arabia, United States, Iraq and Kuwait. India’s imports of textile industry in 2011-12 (P) were Rs. 24800.43 crore compared to Rs. 19036.95 crore in 2010-11. Its share in total import was 1.06% in 2011-12 against 1.13% in 2010-11.9

9 Foreign Trade Statistics of India 2012 (Principal Commodities & Countries) DGCI&S, Kolkata, retrieved on 8 August 2013, http://www.dgciskol.nic.in/ PRESENT STATUS OF TEXTILE INDUSTRY IN INDIA
Indian textile industry is one of the leading textile industries in the world. Though was predominately unorganized industry even a few years back, but the scenario started changing affect the economic liberalization of Indian economy in 1991. The opening up of economy gave the much-needed thrust to Indian textile industry, which has now successfully become one of the largest in the world.10
Indian Textile Industry has an overwhelming presence in the economic life of the country. Apart from providing one of the basic necessities of life, the textile industry also plays a pivotal role through its contribution to industrial output, employment generation and the export earnings of the country. The sector contributes about 14% to the industrial production, 4% to the GDP and 11% to the country’s export earnings. It provides employment to over 35 million people. The textile sector is the second largest provider of employment after agriculture. India has potential to increase its textile and apparel share in the world from the current level of 4.5% to 8%and reach US$ 80 billion by 2020.11
Indian textile industry is one of the leading industry in the world. Currently it is estimated 52 billion. The Indian textile industry is extremely varied, with the hand-spun and hand woven sector at one end of the spectrum, and the capital intensive, sophisticated mill sector at the other. The decentralized powerlooms/hosiery and knitting is largest among textile sector. The close linkage of the industry to agriculture and the ancient culture and tradition of the country make the Indian textile sector unique in comparison with the textile industry of other countries. This also provides the industry with capacity to produce a variety of products suitable to different market segments, both within and outside the country.12
OBJECTIVE OF STUDY
In this background the present study will be an attempt to analyze the performance of textile industry in India. The major objectives of this study are tentatively planned as follows:-
1. To analyze the performance of sub-sectors of textile industry through different selected variables such as profit ratios, trade intensity etc during 2003-13.
2. To make inter sector/firm comparison between the different sector of this industry.
3. To estimate the effect of FDI in this sector.
4. To identify the areas which may be targeted to achieve the higher goals of textile sector.
10 Muthukannan, K, & Suganya, C. “An Analysis of Current Scenario of Indian Textile Industry”, retrieved 21 august 2013,www.fibre2fashion.cm 11 Corporate Catalyst India (2013). “A brief report on textile industry in India”, retrieved 21 august 2013, http://www.cci.in/survey_report.html
12 Government of India (2013) . “Annual Report 2012-13”, Ministry of Textiles. New Delhi, www.texim.nic.in
REVIEW OF LITERATURE
Palanvelu & Ganesh (2013)13. This article demonstrates the role of Indian Trade Policy in textile sector, and analyzes the impact of government support and incentives. Further it also explores the contributions of textile industry towards the economic development of the nation through export trade.
Shahid & Chaudhary (2013)14 .This paper examines the growth and development of the Technical Textile industry in India covering a decade from 2002 to 2012. Further, the researchers compare the eleventh five year plan period performance of the Indian Technical Textile Industry with tenth five year plan period performance in order to know the progress over the years. The growth and development of the industry is measured in terms of production, export and import. For the purpose of study, Paired sample t Test is being used in order to compare the both plan period performance i.e. tenth and eleventh plan. The results reveal the statistically reliable difference between the tenth and eleventh plan mean values of the three selected parameters in Technical Textile industry, which leads to a conclusion that growth of the industry, has improved significantly during the eleventh five year plan.
Indhumathi & Palanivelu (2013)15. In this paper an attempt is made to know the profitability and financial position of selected textile companies, for accomplishment of the objective, the data collected from the annual reports from 2001-2010 from the selected textile companies in India, the collected data is analyzed and computed to fit for drawing inferences, this study utilizes various ratios analysis, correlation, trend, compounded growth rate. The results revels that there is a close relationship exist between the financial performances of the selected textiles companies in India and the proportion of changes in return on total assets.
Hashmi, Syed Khalid (2012)16. The paper seeks to highlight the importance of Indian Handicrafts Industry as a contributor to Indian Economy by studying the existing and potential Market and possible threats. And study the comparative handicraft product and market of a developed country. The data is secondary obtained from archives of Government –Ministry of Tourism, Ministry of Textiles, Trade Papers, bulletins etc.

13 Palanvelu, V.R. & Ganesh, R. (2013). “The Growth of Indian Textile Industry Fuelled by The Indian Trade Policy”, , International Conference on Business, Economics, and Accounting , 20 – 23 March 2013, Bangkok - Thailand , retrieved 21 august 2013, http://www.caal-inteduorg.com
14 Indhumathi, C. & Palanivelu, P. (2013). “A Study on Financial Performance of Selected Textile Companies in India”, volume 2 issue7 july 2013 issue no.2277 8160,, Global Research analysis.
15 Shahid , Nazneen & Chaudhary , Asiya. (2013). “Growth and Development of Technical Textiles In India: A Comparative Analysis Of Tenth And Eleventh Five Year Plan”. International Journal of Engineering Research & Technology (IJERT) Vol. 2 Issue 5, May - 2013 ISSN: 2278-0181.
16 Hashmi, Syed Khalid. (2012). “Market for Indian Handicrafts”, Millennium Institute of Management, Aurangabad, Excel Journal of Engineering Technology and Management Science ,Vol no.1, December-January 2012 ISSN 2249-9032, http://excelpublication.com/issue/Vol-I/Market_for_Indian_Handicrafts.pdf
Shrimali, devendra (2012)17. This paper attempts to study the global textile & clothing trade pattern and export performance of Indian textile & clothing industry vis-à-vis its competitors in the United States market. The empirical findings suggest that India in textile & clothing market of United States not only losing its share to China but also find it difficult to compete with countries like Bangladesh and Cambodia in certain segments. It has also been noticed that Indian exports of textiles & clothing is highly correlated with global trade pattern in contrast to China, Bangladesh etc.
Chaudhary, Asiya (2011) 18. This paper focused largely on Indian textile industry and it position in the world in terms of textile & clothing exports. Further it investigates the role of FDI in the industry & what Indian government is doing for the promotion of the industry. The study focuses whether the impact of MFA phase out was negative or positive. They have calculated Multiple Correlation co-efficient for each factor. The research reveal the there is a positive impact of MFA phase out on Indian textile exporters and their profit.
Ray, Sarbapriya (2011) 19. This study attempts to evaluate and analyse the industrial performance of Indian textile sector in terms of economic capacity utilisation at aggregate level over a period from 1979-80 to 2008-09 and SWOT analysis has also been conducted to have an insight into the performance of the said industry. In this study, Optimal output is defined as the minimum point on the firm’s short run average total cost curve and the rate of capacity utilisation is merely ratio of its actual output to capacity output level. Choice theoretic framework is adopted to estimate the optimal capacity output. The empirical findings suggest that there exist considerable variations in the capacity utilisation rates over years within same industry. There has been declining trend in the growth rate of capacity utilisation in this industry during post reforms period due to slow increase in actual output resulting from stagnated demand probably and rapid expansion of capacity output as a result of abolition of licensing rule consequent to economic reform. It has also been noticed that capacity utilisation in this particular industry has been gradually increasing after Multi-fibre Agreement (MFA) has phased out since 2005, and it continued till economic recession begins during 2008 and the industry is gradually striving harder to sustain its past achievement.
17 Shrimali, devendra. (2012). “Performance of Indian Textile & Clothing Industry in the United States Market: A Post ATC Analysis”, Abhinav National Monthly Refereed Journal of Research in commerce & management, volume no.2, issue no.3, ISSN 2277-1166, retrieved from the website: http://www.abhinavjournal.com/images/Commerce_&_Management/Mar13/9.pdf
18 Chaudhary, Asiya. (2011). “Changing structure o Indian textile industry after MFA (Multi fibre agreement) phase out: A Global perspective”, Far East Journal of Psychology and Business, Vol. 2 No 2, February 2011, retrieved 21 august 2013, http://www.fareastjournals.com/files/V2N2P1.pdf
19 Ray, Sarbapriya. (2011). “Exploring Industrial Performance in Textile Sector of India under Liberalised Trade Regime: A Study through Economic Capacity Utilisation”, Journal of International Economic Academic Research, volume no.11, issue no.3.
Aziz, Alqa (2011) 20. Studies the ready-made garments (RMG) export performance of India and its competitors in respect of the major import destinations. India is in a position to increase its market share in ready-to-wear garment export to USA after the removal of Quotas. The impact of abolishing of quota system and economic crisis on exports of ready to wear garments to its major markets in post quota regime has been examined. The detailed analysis of recession hit markets brings out the winners and strugglers in the market. This research paper makes a critical appraisal of the prevailing issues affecting the RMG export import trend.
Bedi, Jatinder S. (2009) 21. This study is an attempt to provide alternative estimates of basic parameters of the industry (number of units, output, value added, employment, number of machines/looms, etc.). The study provides a review of the government policies and programmes for the industry by analyzing the relevant documents. It provides some insights into the corrections required in various policy measures and explores various measures to make the industry more efficient and competitive. The detailed analysis of recession hit markets brings out the winners and strugglers in the market. This research paper makes a critical appraisal of the prevailing issues affecting the RMG export import trend. This research is based on a questionnaire survey of ready- to-wear garment exporters in New Delhi, India.
Kathuria, L. M. (2008) 22. discussed that from January 1, 2005, the Multi-Fiber Agreement (MFA) has been replaced by the Agreement on Textiles and Clothing (ATC), under which the world trade in textiles and clothing has become free without the restriction of quotas. In the post MFA phase-out era, Indian clothing exporters are likely to face tough competition from countries like China, Bangladesh, Vietnam, and Mexico in the international market. Hence, the paper examines some of the general implications of MFA phase-out and undertakes an analysis of competitiveness of Indian clothing export sector with the help of Porter’s Diamond Determinants of National Advantage, namely, ‘Factor Conditions’, ‘Demand Conditions’, ‘Related and Supporting Industries’ and ‘Local Rivalry’.

20 Aziz, Alqa. (2011). “RMG Trading Scenario in India and Other Major Countries-Comparative Performance & Issues”, International Journal of Business and Management, Vol. 6, No. 6; June 2011, retrieved 21 august 2012, http://www.ccsenet.org/journal/index.php/ijbm/article/view/10849/7701
21 Bedi, Jatinder S. (2009). “Assessing the Prospects for India’s Textile and Clothing Sector”, national council for applied economic research, July 2009, retrieved 26July2013,http://texmin.nic.in/reports/Report_NCAER_CITI_nmcc_20091001.pdf
22 Kathuria, L. M. (2008). “An Analysis of Competitiveness of Indian Clothing Export Sector Using Porter’s Model”, Department of Business Management, P A University, Ludhiana, India, The Icfai University Journal of International Business, Vol. III, No. 4, 2008
Tewari , Meenu (2005) 23. This paper reviews a growing body of literature that focuses on the institutional organization of global trade networks and production chains. It shows that firms today face altered conditions of competition that are pushing them to compete on the basis of factors other than price and cost competitiveness. The paper also argues that the attribution of China’s remarkable export performance in textiles and apparel to its low unit costs and large scales of production is, in part, a misreading of the China story. The end of quotas and the ongoing churning in the global division of labour in apparel and textiles can be an opportunity for apparel producing firms in India with their severe handicap arising from labour policy induced rigidities, to chart an alternative growth path. This paper provides a view of this alternative.

RESEARCH METHODOLOGY
For any study research methodology is the most important part which guided the other researchers. In the present study the research methodology is sub divided into following sections:-
A. Identification of the variables
To analyze the performance of the sector, there are number of variables which contribute to the growth rate of the sector. On the basis of review of literature conducted for the study many variables may be selected such as: - trade, profit, no. of employees, income, turnover etc. B. Construction of the variables
On the basis of the possibility of availability of data and time some variables such as profitability ratios, trade intensity and income may be selected.

23 Tewari , Meenu. (2005). “The Role of Price and Cost Competitiveness in Apparel Exports, Post-MFA: A Review”, Indian Council for Research on International Economic Relations, November 2005 , working paper no. 173 , retrieved 8 august 2013, http://www.icrier.org/pdf/WP173b.pdf
Profitability Ratios:-
1. Net Profit Ratio:
Net Profit is obtained when operating expenses; interest and taxes are subtracted from the gross profit. It indicates that the portion of sales is left to the proprietors after all costs; charges and expenses have been deducted. Net Profit ratio is differ from the operating Profit to Sales Ratio in as much as it is computed after adding non-operating surplus / deficit.(Difference of non-operating incomes and non-operating expenses). The net profit ratio is measured by dividing profit after tax by Net Sales:

Profit after tax Net Profit Ratio = -------------------- x 100 Net Sales

This ratio is the overall measure of the firm’s ability to turn each rupee sales into net profit. While the net profit is inadequate, the Firm will fail to achieve satisfactory return on owner’s equity due to various reasons. Such as Falling price, rising costs and declining sales Thus, this ratio is very useful to the proprietors and widely used as a measure of overall profitability.

2. Gross Profit Ratio:
“The excess of the net revenue from sales over the cost of merchandise sold is called gross profit, gross profit on sales or gross margin”. This ratio is calculated by dividing the gross profit by net sales and is usually expressed as a percentage. The formula of gross profit ratio is given below: Sales - Cost of Goods Sold Gross Profit Ratio = ----------------------------------- x 100 Sales Gross Profit = ----------------- x 100 Sales
The gross profit ratio highlights the efficiency with which management produces each unit of product as well as it indicates the average spread between the cost of goods sold and the sales revenue. Any fluctuation in the gross ratio is the result of a change in cost of goods sold or sales or both.24

24 Goel, D.K. & Goel, Shelly. (2008). “Financial Accounting”, APC books publication, p.p. 4.36-4.39
3. Operating Profit Ratio
This ratio indicates the relationship between operating profit and net sales in the form of percentage. Operating profit arrived at by adjusting all non-operating expenses and incomes in net profit in the other words it can be said profit before depreciation and taxes. A consistently high ratio tells us the effective and efficient operation of the business. This ratio helps find out the profit arising out of pure production process i.e. the main business of production and sales. Thereby reflecting the effect of other incomes and expenses included in net profit. Operation Profit
Operating Profit Ratio = -----------------------x 100 Net Sales
Operation profit = Sales- (Cost of goods sold + operational expenditure)

4. Earning Per Share (EPS)
Earning per share is widely method of measuring profitability of the common shareholders investment it measures the profit available to the equity shareholders on per share basis. The earning per share is calculated by dividing the profit after taxes by the total number of common shares outstanding. Profit after Tax
Earning Per Share = ----------------------------------------------x 100 Number of Equity share outstanding
The earnings per share simply show the profitability of the firm on a per share basis. It does not reflect how much is paid as dividend and how much is retained in business but as a profitability index. It is a valuable and widely used ratio” Thus, the profitability of common shareholder’s investment can be measured easily by earning per share.

5. Return on Capital Employed.
In day to day use the term “capital employed’ is used to indicate the total investment in the firm whether owners or borrowed. But the capital employed in a firm may be defined in a number of ways and the two most widely accepted definitions are Gross Capital Employed and Net Capital Employed. Gross Capital Employed usually comprises the total assets used in the business while net capital employed consists of the total assets of the business less its current liabilities.

Return on Gross Capital Employed
On the ground that the current liabilities are also a form of capital and all funds must be effectively employed. The Gross Capital Employed concept may be favored by the analyses. Thus;
Gross Capital Employed = Fixed Assets+ Current Assets25

25 ibid
Net Capital Employed
On the ground that further either only short term creditors or only short term debtors should be included in the capital employed. The net capital employed concept may be favored.

Net Capital Employed= Gross capital employed-Current liabilities
OR
Net Capital Employed= Fixed assets- Net working capital

6. Return on Owners Equity:
Return on owner’s equity is also known as return on shareholder’s equity. This ratio shows how the firm will have used the resources of owners. It may true that this ratio is one of the most relationships in financial analysis. The return on owner’s equity is calculated by following formula. Profit after Tax
Return on Owners Equity = --------------------x 100 Owner’s equity
Where, owners equity = share capital + reserve & surplus. This, ratio reflects great interest to present as well as prospective shareholders and also important for management, because management has responsibility of maximizing the owners wealth in the market place.
This ratio would be compared with the ratios for other similar companies as well as the industry average. Thus, it shows the relative performance and strength of the company.

7. Return on Net Worth:-
Return on net worth is also known as return on shareholder’s equity. This ratio shows how the firm will have used the resources of owners. It may true that this ratio is one of the most relationship in financial analysis. This return on owner’s equity is calculated by following formula: Net Profit after Taxes and Interest
Return on Net Worth = -------------------------------------------- x 100 Net Worth

Where, owner’s equity = share capital + reserve & surplus.26

26 Loth, Richard. “Profitability Indicator Ratios: Introduction”, retrieved on 21 October 2013, http://www.investopedia.com/university/ratios/profitability-indicator/
This ratio indicated the extent to which this objective has been fulfilled. This, ratio reflects great interest to present as well as prospective shareholders and also important for management, because management has responsibility of maximizing the owners wealth the market place.
This ratio would be compared with the ratios for other similar companies as well as the industry average. Thus, it shows the relative performance and strength of the company.27 C. Scientific tools and duration of the study

To analyze the performance of textile industry we have selected statistical and ecometrical tools such as correlation/ regression techniques will be used. The present study will cover the period from 2003-13.

TENTATIVE CHAPTERIZATION
1. Introduction
2. Review of literature
3. Objectives of research
4. Research methodology
5. Analysis of textile industry
6. Sector/firm wise analysis of textile industry
7. Performance analysis of textile industry
8. Finding of the study
9. Conclusion & suggestion
10. Bibliography

27 ibid
BIBLIOGRAPHY
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Bedi, Jatinder S. (2009). “Assessing the Prospects for India’s Textile and Clothing Sector”, national council for applied economic research, July 2009, http://texmin.nic.in/reports/Report_NCAER_CITI_nmcc_20091001.pdf
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Foreign Trade Statistics of India 2012. (Principal Commodities & Countries) DGCI&S, Kolkata, retrieved on 8 august 2013, http://www.dgciskol.nic.in/
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