Home / Knowledge / News / Textiles / 'Half hearted approach by Govt' - Mr Sunil Jain, NITMA
'Half hearted approach by Govt' - Mr Sunil Jain, NITMA
12
Dec '08
The Indian textile industry has been saddled with factors like steep hike in minimum support price for cotton resulting in high cotton price, hardening of bank interest rate, withdrawal in export incentives, high transport costs, acute power shortage, electricity duty charged by various State Governments for production of own power, poor off-take for textile products due to global recession, etc.

The various relief measures sought by the industry include restoration of interest subvention to 4%, restoration of duty drawback rates, two year moratorium for repayment of loans and avoid NPAs, relax banking norms, refund the Technology Up-gradation Fund (TUF) Scheme interest arrears (over one year backlog), exempt fuels meant for power generation from all taxes and levies (considering the acute power shortage which is likely to continue for another three to four years), etc.

The economic stimulus announced by Government has provided marginal relief to the textile industry. The Government has extended only half hearted approach to the urgent requirements of the industry, Shri Sunil Kumar Jain, President of Northern India Textile Mills Association (NITMA) said in a press statement. He stated that facilities extended to the sector are either by way of releasing withheld benefits or by way of restoring withdrawn benefits.

In the case of TUF and CST/TED payments, reimbursements which had been withheld for a long time will now get paid on the basis of the fund allocation provided in the Package. He said that 4% cut in the ad-valorem CENVAT rate across the board would help to reduce the cost of production. In the case of export credit, subvention of 4% had been withdrawn from October 2008 i.e. much earlier than original planned, out of which 2% has been restored now.

He added that 2% interest subvention on packing credits would give marginal relief while 4% is essential to compete in the global market and also considering the substantial increase made by Pakistan and China in the export incentives.

Shri Jain added that, some new facilities in the case of service tax have been extended to the sector. Increase in refund of service tax on agency commission from 2% to 10% will help textile units. Refund of post production service taxes to units availing drawback facility will also help the textile sector, he said.

Shri Jain stated that major requirements of the sector have not been covered in the Package. “Restoration of drawback rates, moratorium of two years for repayment of principal amounts against term loans in view of the working capital problems of this loss making industry, and the restoration of the remaining 2% of subvention for export credit is the major requirements that need immediate attention.” He added that the restored subvention should be made available from 1st October 2008, the date from which it had been withdrawn earlier.

Shri Jain pointed out that the serious problems of the cotton situation have not been even touched upon by the Government in the package. The Government has increased Minimum Support Price by more than 40% which have increased the domestic cotton prices by 20% above international prices. The margin money charged by banks for funding cotton purchases by mills may be reduced from the current 25% to 10%.


Must ReadView All

SIMA makes pre-budget recommendations to Indian govt

Textiles | On 22nd Jan 2018

SIMA makes pre-budget recommendations to Indian govt

Exemption of 5 per cent goods and services tax (GST) on raw cotton,...

Building of Ethiopian textile unit by Chinese firm starts

Textiles | On 22nd Jan 2018

Building of Ethiopian textile unit by Chinese firm starts

Chinese firm Wuxi No. 1 Cotton Mill will build a textile plant in...

Indian minister urges apparel industry for dumping data

Textiles | On 22nd Jan 2018

Indian minister urges apparel industry for dumping data

Indian textiles minister Smriti Irani recently urged the apparel...

Interviews View All

Headhonchos
Indian textile value chain

'One nation, one tax' is a great concept

Varinder Singh Jawanda
Trendy Bharat

Sizing and fitting issues are inherent problems for companies expanding...

Top executives
Fashion houses, India

With technology, it has become easier to ensure IPR

Ravindra Jain, Ashish Baid

Oswal Prints Private Limited has been manufacturing and exporting ethnic...

Urmil Arya

Sushila International, a well established textile organisation established ...

Nitesh Mittal

Kusumgar Corporates is a leading manufacturer of technical textiles and...

Lynda Kelly
Suominen Corporation

Suominen Corporation is a manufacturer of nonwovens as roll goods for...

Kerem Durdag
Biovation II LLC

Kerem Durdag, CEO, Biovation II LLC, provides an insight into future...

Suresh Patel
Sidwin Fabric

Sidwin Fabric is a manufacturer and exporter of polypropylene textiles and ...

Divvya and Nidhhi Gambhir
Walnut

<b>Divvya and Nidhhi Gambhir</b> started their career with the launch of...

Robert Brunner
Devereux

Golfwear and menswear brand Devereux is set for greener pastures. Robert...

Jay Ramrakhiani
Occasions Elegance Wear

It is believed that by early 19th century, Varanasi weavers had moved away ...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

January 2018

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
69.1%
No
13.4%
Skip
17.5%

Total Votes: 97

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
63.9%
No
28.9%
Skip
7.2%

Total Votes: 97

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
87.6%
No
9.3%
Skip
3.1%

Total Votes: 97

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
82.5%
No
8.2%
Skip
9.3%

Total Votes: 97


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search