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TEA seeks relief for textile SMEs
06 Jun '15
2 min read
The Tirupur Exporters Association (TEA), has requested micro, small and medium enterprises minister Giriraj Singh to take up the demand of the entrepreneurs in SME-dominated Tirupur knitwear cluster for raising the threshold limit for MSMEs from Rs10 crore to Rs. 25 crore to avail various subsidies and incentives.
In a memorandum to Singh, TEA also asked the minimum ceiling of investment for readymade garment manufacturers under SME non-corporate sector to be scaled down to Rs 5 crores from Rs 25 crores to boost exports. The present provisions of Sec.32Ac envisages a deduction of 15 per cent of the value of new machinery acquired and installed in the year. This deduction is available only to corporate assesses and there is a ceiling of the minimum investment at Rs.25 crores in purchase and installation of new machinery.
TEA also demanded raising the threshold limit for cash payments towards expenses from an ‘outdated’ Rs 20,000 to Rs 1 lakh in tune with current inflationary trend.
The memorandum also pressed for the extension of the pre and post shipment rupee export packing credit interest subvention at 3 per cent for the garment sector for another two years with retrospective effect from April 1, 2015. The scheme had expired in March 2014.
TEA pointed out that to protect the export sector from increasing credit rates, a separate chapter for export sector is required in RBI Monterey Policy as suggested by Padmanabhan Committee constituted by RBI and the export sector should be delinked with the base rate system being followed by the banks. Till a separate chapter for export is announced, the bank credit rate given to exporters may be fixed at 7 per cent as the interest rates prevailing in competing countries are lower than Indian banks rates.
In the memorandum, TEA also demanded that the government take steps to formalize free trade agreement (FTA) and comprehensive economic partnership agreement (CEPA) with the European Union that would help raise Indian garment exports to Europe from 42 per cent to 55 per cent and break the stranglehold of Bangladesh which enjoys duty free market in the EU. TEA also asked the government to expedite CEPA with Canada which is a promising market for knitwear exporters. (SH)
In a memorandum to Singh, TEA also asked the minimum ceiling of investment for readymade garment manufacturers under SME non-corporate sector to be scaled down to Rs 5 crores from Rs 25 crores to boost exports. The present provisions of Sec.32Ac envisages a deduction of 15 per cent of the value of new machinery acquired and installed in the year. This deduction is available only to corporate assesses and there is a ceiling of the minimum investment at Rs.25 crores in purchase and installation of new machinery.
TEA also demanded raising the threshold limit for cash payments towards expenses from an ‘outdated’ Rs 20,000 to Rs 1 lakh in tune with current inflationary trend.
The memorandum also pressed for the extension of the pre and post shipment rupee export packing credit interest subvention at 3 per cent for the garment sector for another two years with retrospective effect from April 1, 2015. The scheme had expired in March 2014.
TEA pointed out that to protect the export sector from increasing credit rates, a separate chapter for export sector is required in RBI Monterey Policy as suggested by Padmanabhan Committee constituted by RBI and the export sector should be delinked with the base rate system being followed by the banks. Till a separate chapter for export is announced, the bank credit rate given to exporters may be fixed at 7 per cent as the interest rates prevailing in competing countries are lower than Indian banks rates.
In the memorandum, TEA also demanded that the government take steps to formalize free trade agreement (FTA) and comprehensive economic partnership agreement (CEPA) with the European Union that would help raise Indian garment exports to Europe from 42 per cent to 55 per cent and break the stranglehold of Bangladesh which enjoys duty free market in the EU. TEA also asked the government to expedite CEPA with Canada which is a promising market for knitwear exporters. (SH)
Fibre2fashion News Desk – India
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