'We were expecting comprehensive package from budget' - SIMA Chief
The Indian textile industry is passing through an unprecedented crisis due to global financial melt down, high bank interest rates, over 45% increase in Minimum Support Prices for cotton, acute power shortage in States like Tamil Nadu etc.
The industry has been appealing to the Centre to announce a comprehensive package for the textile industry on par with competing countries like China and Pakistan to revive the industry from the recession and sustain its survival. 7/12 and 2/1 stimulus packages announced by the Government came out with only Government dues and few cosmetic changes which are totally inadequate for the industry to face the cut throat competitions in the global market.
Therefore, the industry was hoping a special package in the interim Budget so that the industry could survive till the next Budget.
Dr.K.V.Srinivasan, Chairman, The Southern India Mills' Association (SIMA), says that interim Budget announced by the UPA Government is totally disappointing for the textile industry. He has said that the industry was expecting bare minimum sops in the interim Budget and a comprehensive package either in the forthcoming stimulus package or the next Budget.
He has added that the Government could have considered two year moratorium period for repayment of loans to avoid NPAs and working capital package for cotton purchase consisting of 7% interest rate, reduction of margin money from 25% to 10% and enhanced credit period to 9 months. He has further said that the usual proportionate allocation of funds for TUF Scheme was also missing in the Budget.
He has pointed out that though the Government had indicated that Rs.1,400 crores allocation in the first stimulus package would meet TUF backlog upto September 2008, the actual allocations would meet only the backlog upto June 2008 and even in that many may not get their reimbursement fully. He has remarked that this would further affect the working capital for the textile industry.
SIMA Chairman has mentioned that the Centre could have exempted liquid fuels meant for power generation from Central Excise, Customs and other levies, considering the acute power shortage prevailing in the country, particularly in States like Tamil Nadu where the textile industry is facing over 60% shortage. He has pointed out that the above measure will not have any financial implication on the Centre since it is only a notional income.
Dr.Srinivasan has mentioned that the only notable feature of the interim Budget is the extension of existing 2% interest subvention for textile export credits till September 2009.
SIMA Chief has feared that many units might be closed in the absence of minimum relief packages throwing several lakhs of people out of jobs. He has pointed out that the textile industry which is the second largest employment provider in the country next to agriculture particularly for the people below the poverty line and therural women folk could have been given due weightage to sustain its survival and also compete with textile majors like China, Pakistan, Bangladesh, etc.
Southern India Mills' Association