Indian entrepreneurs urge RBI to prioritize textile sector

04 Jan '14

2 min read

Indian entrepreneurs representing the textiles sector of the country have urged the Reserve Bank of India (RBI), to recommend the Government for prioritizing the sector.

At a meeting between textile sector industrialists and RBI Deputy Governor K C Chakrabarty, in the city of Coimbatore, the Southern India Mills Association deputy chairman M Senthilkumar appealed to the RBI to recommend prioritizing the textile sector, as well as announce a liberal credit policy for the sector, reports The Economic Times quoting PTI.

Mr. Senthilkumar also sought a Cotton Stabilization Fund Scheme from the central bank of the country, consisting of working capital loan for purchasing cotton during December to March at 7 percent interest rate, reducing the margin money from 25 percent to 10 percent and increasing the credit limit from three months to nine months.

At the meeting, the RBI Deputy Governor slammed subsidies stating that it was not serving any useful purpose.

According to the RBI official, subsidy kills innovation and interest of the people, by making the system uncompetitive, resulting into lack of transparency and sometimes even leading to scams.

During the meeting, the Tirupur Exporters’ Association reiterated its demand for a separate section for exports sector in the monetary policy, suggesting that banks might evolve a composite audit rating mechanism so that micro, small and medium enterprises (MSMEs) do not have to bear any additional cost for rating and unlisted MSMEs could be kept out of the ambit of credit rating.

The meeting saw interactions between the RBI official and various industrialists representing different sectors of the country, including textiles.

Fibre2fashion News Desk - India

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