Decline in textile production & exports
The Government has not conducted any study to assess the impact of global slowdown on Indian textile and clothing industry. However, the Confederation of Indian Textile Industry and other Textile Export Promotion Councils have conducted a study on
“Impact of Economic slowdown on Indian Textile and Clothing Industry”.
The study showed decline in textile production and textile exports, decline in textile imports by India's major trade partners and deterioration in the financial performance of textile and clothing companies during 2008-09. This was stated by the Minister of State for Textiles, Smt. Panabaaka Lakshmi in the Rajya Sabha, in a written reply to a question by Shri Ramdas Agarwal.
The Minister further informed the House that as per data published by the Directorate General of Commercial Intelligence and Statistics, Kolkata, India's textiles exports have declined to US $ 18.52 billion during April-February' 2008-09 from US $ 19.55 billion (5.31 per cent) as compared to the corresponding period of the previous financial year. To strengthen and boost the export-intensive industries, the Government announced two stimulus packages, one on 7th December, 2008 and the other on 2nd January, 2009. These packages contained several measures, which were beneficial to textile exporters.
The Minister further stated that the Union Budget 2009-10 also contained several measures to boost the textile industry and textile exports. The important measures announced in the Budget are the following:
(i) Enhancement of the Annual Plan 2009-10 outlay of the Ministry of Textiles by Rs.2000 crore to Rs.4500 crore as compared to the BE 2008-09 of Rs.2500 crore. An outlay of Rs.3140 crore has been earmarked for the Technology Upgradation Fund Scheme (TUFS).
(ii) Interest subvention of 2 per cent on pre-shipment credit for seven employment oriented export sectors extended beyond the current deadline of September 30, 2009 to March 31, 2010.
(iii) List of specified raw materials and equipment imported by manufacturer- exporters of leather goods, textile products and footwear industry which are fully exempted from customs duty, subject to specified conditions, to be expanded.
(iv) To facilitate flow of credit at reasonable rates, Rs.4000 crore provided as special fund out of Rural Infrastructure Development Fund (RIDF) to small Industries Development Bank of India (SIDBI). This will incentivise Banks and State Finance Corporations (SFCs) to lend to Micro and Small Enterprises (MSEs) by refinancing 50 per cent of incremental lending to MSEs during the current financial year.
(v) Adjustment assistance scheme to provide enhanced Export Credit and Guarantee Corporation (ECGC) cover at 95 per cent to badly hit sectors extended upto March 2010.
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