Interviews
Putting cotton export under OGL premature decision - SIMA
13 Sep '11
5 min read
SIMA chief has also stated that the yarn market is on the revival mode and yarn prices started improving as the yarn inventory is approaching to a normal level. He has also stated that festival orders are picking up and therefore, he has hoped that the cotton spinning sector would soon approach break even level and resume normalcy during October, provided the Central Government announce a bail out package of converting eroded working capital into five year term loan and improving the drawing power of the mills to procure cotton in the forthcoming season.
He has stated that if this is not done, the cotton traders will hoard and speculate the prices, resulting in more than 90% of the spinning mills into NPAs across the country. He has also stated that the Government should also consider giving two year moratorium on repayment of loans and interest to the mills to remain financially healthy and remain eligible for availing TUF subsidy. He has further stated that for the present spinning capacity, the country should export at least 120 million kgs of cotton yarn per month after fully meeting the domestic requirements as against the current export of 60 million kgs.
He has stated 4.5% interest subvention and reasonable DEPB/ drawback benefits coupled with refund of DEPB/ drawback benefit suspended for the period from April 2010 to till date have to be restored. He has also mentioned that RBI has to issue necessary guidelines and enable the banks to give a special dispensation by RBI to allow the above restructuring without any additional provisioning to be done by the banks. Further the asset quality of such restructured companies should not be downgraded.
SIMA Chief has also appealed to the Centre to withdraw the 10% central excise duty levied on branded readymade garments and made-ups to revive the domestic consumption to a normal level. He has said that the reduction of Tamilnadu State VAT on cotton cone yarn from 5% to 2% on par with CST is essential to create a level playing field and better compliance. He has also pleaded the Tamilnadu Government to sort out the power loom strike issue on emergency basis, bring normalcy in the market condition to grab the opportunities of festival season.
He has stated that if this is not done, the cotton traders will hoard and speculate the prices, resulting in more than 90% of the spinning mills into NPAs across the country. He has also stated that the Government should also consider giving two year moratorium on repayment of loans and interest to the mills to remain financially healthy and remain eligible for availing TUF subsidy. He has further stated that for the present spinning capacity, the country should export at least 120 million kgs of cotton yarn per month after fully meeting the domestic requirements as against the current export of 60 million kgs.
He has stated 4.5% interest subvention and reasonable DEPB/ drawback benefits coupled with refund of DEPB/ drawback benefit suspended for the period from April 2010 to till date have to be restored. He has also mentioned that RBI has to issue necessary guidelines and enable the banks to give a special dispensation by RBI to allow the above restructuring without any additional provisioning to be done by the banks. Further the asset quality of such restructured companies should not be downgraded.
SIMA Chief has also appealed to the Centre to withdraw the 10% central excise duty levied on branded readymade garments and made-ups to revive the domestic consumption to a normal level. He has said that the reduction of Tamilnadu State VAT on cotton cone yarn from 5% to 2% on par with CST is essential to create a level playing field and better compliance. He has also pleaded the Tamilnadu Government to sort out the power loom strike issue on emergency basis, bring normalcy in the market condition to grab the opportunities of festival season.
The Southern India Mills' Association (SIMA)
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