He has stated that the Textile Ministry has also recommended for the relief package during November, 2011. Mr.Dinakaran has stated that in spite of numerous representations from the industry Associations and the meetings of several delegations with the Government, the Finance Ministry and RBI are yet to show their sympathy on the highly labour intensive industry. Mr. Dinakaran has stated that any further delay in announcing the package would lead to irreparable conditions throwing lakhs of people out of jobs resulting in industrial and social unrest across the nation.
SIMA Chairman has appealed to the Hon'ble Union Finance Minister to immediately announce a relief package consisting of moratorium on repaly of all term loans for 24 months effective from 1st July, 2011 without asset reclassification or additional provisioning including for repeated rescheduling and rescheduling of loans under CDR.
Mr.Dinakaran has stressed that RBI guidelines is essential for repeated restructuring as majority of the mills have already availed the said facility during the global recession in 2008-09 taking advantage of the bail out package announced during that time. SIMA Chairman has also stated that yet another financial assistance required is the conversion of eroded working capital caused on account of steep decline in the prices of raw materials and finished goods into five year working capital term loans with a moratorium of six months.
Mr.Dinakaran has stated that though the spinning mills are currently incurring Rs.10/- to Rs.20/- per kg of yarn for the current cotton and yarn prices, the mills are forced to work at 60 to 70% capacity utilization to retain the workers without any industrial relations problems.
He has further said that as per the norms of Textile Research Associations, a spinning mill working at less than 85% capacity utilization would tend to become sick and therefore, it is essential to revive the capacity utilization on a war footing. SIMA Chief has pointed out that lakhs of cotton farmers are suffering today as the mills are not able to procure cotton due to financial crunch. Mr.S.Dinakaran has stated that the aforesaid proposals will have no revenue implications since the interest would continue to be paid on all loans.
The Southern India Mills' Association (SIMA)
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