'Revival of sector depends on govt support' – Cheslind textiles

24 Jun '09

7 min read

“Our associations at various levels have represented to the Govt. of India in the past and there were certain support measures announced by the then Govt., but those measures did not help the industry to revive to the desired level and get momentum for the future. With new Government at the Centre, it is expected that in the forthcoming Central Government's budget, the industry would get the desired support. In a recent meeting with the Minister of Textiles, Mr Dayanidhi Maran, our association has once again emphasised the need for immediate support on the following issues”;

1)Raw Cotton -
Relax working capital norms specifically for cotton by charging interest at 7 percent against PLR at present. Reduce the margin money from 25 to 10 percent and increase the credit limit period of 3 to 6 months to nine months. Withdraw 5 percent export incentive offered for export of cotton and also curtail the bulk discount sales as practiced by the CCI and NAFED which benefited only the cotton traders and the competing countries like China, Pakistan, Thailand and Bangladesh.

Streamline the roles of CCI and NAFED particularly the procurement and sales policy and ensure that the benefits reach only the cotton farmers and the industry and not the handful number of traders as happened during the current cotton season and the last but not the least, revamp the MSP for raw cotton on a scientific basis so that the interests of both the cotton farmers and the textile mills are taken care of.

2)Manmade Fibres -
Withdraw import duty and the central excise duty on manmade fibre including their intermediaries so as to benefit the weaker section of the people. Since cotton textiles have become expensive, the poorer section of the society can afford only the synthetic textiles and currently, the consumption of cotton and synthetic textiles in India is in the ratio of 60:40 as against a total opposite in overseas countries.

3)Considering the undue delay in reimbursing TUF interest subsidy and which has eroded the working capital of mills, either make the interest subsidy as net of interest or convert all the Government dues including TUF subsidy, TED etc., into working capital margin money.

4)Relax the banking norms particularly for CDR proposals and moratorium on repayment of term loans so that NPAs are avoided and also extend the repayment period for TUF loans to 15 years.

5)Export Incentive -
Reinstate the interest subvention of 4% on export credit effective from October 2008. Increase the duty drawback taking care of all State levies, cross subsidies, surcharges on power and other infrastructural cost including transport so that the Indian textile and clothing products are made competitive in the global market.

6)Withdraw excise and customs duty on all liquid fuel meant for power generation by the textile industry ( Tamil Nadu alone accounts for one-third of the textile business in the country and is facing 50 percent power shortage and the trend is likely to continue for another three years)

7)Refund accumulated Cenvat Credit

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