SISSPA presents Pre-Budget Memorandum

12 Feb '08

5 min read

We would also like to inform you that already a lot of units are feeling the pinch, an early solution to above problems will prevent the industry from becoming sick and the workers losing their jobs.

Hence, we humbly request you to recommend for a moratorium of up to 2 years depending upon the level of exposure to reduce the burden on the industry and further insulate both the industry and bankers from the problem of non performing assets (NPAS).

3.RATIONALIZATION OF THE DUTY DRAWBACK AND DUTY ENTITLEMENT PASS BOOK (DEPB) SCHEME'S:-
We all know that the purpose of the schemes is to refund the duties and excise levies suffered by the exporters. Our Association feels that these schemes should be made applicable only to the manufacturing exporters and not to all the exporters as it's the case now.

We strongly feel that such a measure will be a boost for those who take the risk of creating a manufacturing asset and also prevent the manufacturers from being squeezed by the merchant exporters. The move will also minimize the malpractices done in the scheme as it would be always easy to asses a manufacturer.

We humbly request you to consider our genuine concerns sympathetically and recommend favourably and help the industry to survive and prosper.

4.BAN ON EXPORT OF RAW COTTON AND EXEMPTION FOR IMPORT DUTY ON COTTON:
The production of 100% cotton yarn is more than 55% of the total yarn produced in our country. In the production of blended yarn also more than 50% of the yarn is produced by using cotton as one of the blend constituent. Our spinners are respected world wide for their expertise in producing the best cotton yarn.

In this scenario, we small spinners fear that if cotton is allowed to be exported without any control in the current season (2007-2008) as done in the past season (2006-2007) our spinners finding it very difficult to get quality cotton at affordable rates.

The most worrying thing is there are reports from the cotton markets that exporters have already contracted huge quantities of the creamy new arrivals in the current season. This has already created a panic among the spinners.

Fearing they have also started entering into forward contracts at abnormal rates, which has resulted in panic buying of more than their current requirement and hoarding.

In view of the above, we request the government not to allow export of cotton based on crop estimates and there is no authenticity on carry over stock figures available. In order to safeguard the interests of all those involved in this industry.

We strongly recommend the government to take immediate steps to create a buffer stocks of half of the industries annual requirement, if not at the worst case a buffer stock of one third of the consumption.

To overcome the shortage of short staple cotton caused due to the arrival of B.T. Cotton and also the shortage of extra long staple cotton, which is already existing.

We request the government to allow duty free import of the same. This move from the government will not affect the interests of our farmers as both the short staple and extra long staple cotton is already in short supply.

South India Small Spinners Association

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