SIMA appeals for relief packages to textile industry

12 Sep '08

5 min read

Concrete and effective relief package for the textile industry is the need of the hour, said Dr K V Srinivasan, the newly elected Chairman of The Southern India Mills' Association (SIMA).

Dr Srinivasan has appealed to the State and Central Governments on the need to announce exclusive package for textile industry as the industry has been passing through worst ever crisis due to various factors like withdrawal of interest subvention for export credits, slashing of duty drawback rates abnormally, revising the minimum support price for cotton steeply, acute power shortage, etc.

Dr Srinivasan mentioned that Tamil Nadu was facing acute power shortage and the situation would become worst in the future. Five to eight hours power shortage daily in Tamil Nadu resulted in 25 to 40% production loss. He recalled that even during earlier periods whenever there was a power shortage or power cut announced by State Government, diesel oil was freely available and it was highly economical for the mills to operate the gensets, which helped the industry to maintain 95% utilization whereas the situation today is totally changed due to shortage of HSD oil and its high cost.

In the present circumstances, he stated that, even well performing productivity mills were able to utilize only 80% of its capacity. Dr Srinivasan quoted the SITRA's findings, which states that textile mills could be healthier only if they were able to achieve at least 90% utilization failing which the mills would automatically become sick. SIMA chief also pointed out that the dual pricing policy of fuel oil would be totally detrimental for the very survival of the textile industry resulting early closure of textile mills.

Dr K V Srinivasan cited that while the textile mills of our competing country Pakistan were able to get a package of Rs.12 Billion, reduction of 3% in subsidy on loans, R & D support for apparel exports for shipments upto 90 days, conversion of one year duty drawback scheme for companies with in-house cotton and sewing facilities, investment support fund to provide 5% interest subsidy on textile machinery, tax credit facility of 20% on investment, two year moratorium on principal and interest payment on loans with commercial banks, he felt such a pragmatic package was not forthcoming in our country.

SIMA Chairman, therefore, appealed to the Central and State Governments to announce the following packages:-
• Distribute the power shortage prevailing in Tamil Nadu equally amongst all the consumers of electricity to minimize the losses of the textile industry
• Ensure adequate availability of HSD Oil
• Tamil Nadu Government to directly import the diesel / furnace oil and supply the same to the textile industry at international price without customs and excise duties
• Tamil Nadu Government to provide suitable subsidy to meet the additional variable cost for generating captive power for captive consumption
• Drop the proposal of dual pricing on fuel oil

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