Budget extremely disappointing for textiles - CITI

29 Feb '08

3 min read

Ignoring the concerns of textiles and clothing industry in the Budget will have the consequence of a large number of units across the textile value chain getting either closed or reducing their level of operation, leading to substantial increase in unemployment. Loan defaults and an increasing number of NPAs will be another immediate consequence.

Shri Patodia has requested the Finance Minister to address these serious issues by including a textile package in the Budget for providing relief to this rupee hit industry by way of a mechanism for return of all taxes to exporters, reduction of excise and customs duties on fibres and capital goods and declaring a moratorium of at least one year for repayment of term loans.

He added that these are all measures that CITI had requested government in its pre-budget memorandum for inclusion in the Budget.

Referring to the allocation of Rs.1090 crore for TUFS, Chairman – CITI stated that this amount will not be sufficient even to service the existing TUFS loans, let alone any new ones.

In fact, there is a backlog of over Rs.600 crore from the year 2007-08 and the requirements for 2008-09 against existing loans will amount to another Rs.1100 crore.

Currently, there is a delay of nearly one year in disbursement of TUFS loans and with the meagre allocation made in the Budget for next year, the delay will only increase in the coming months. Shri Patodia requested for a substantial increase in the allocation for TUFS for 2008-09.

Confederation of Indian Textile Industry (CITI)

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