TEXPROCIL Chairman welcomes Economic Stimulus Package
Shri V.S.Velayutham, Chairman of The Cotton Textiles Export Promotion Council (TEXPROCIL) has welcomed the much awaited economic stimulus package announced by the Hon'ble Prime Minister, for the economy in general and the export sector in particular.
The package announced incorporates most of the demands made by Texprocil with the government. However, considering the enormous challenges faced by exporters of textile goods from India, industry expects some more measures to be announced in the near future.
An across-the-board cut of 4% in the ad valorem Cenvat rate would give a fillip to the manufacturing sector and enable reduction in the prices.
He has also welcomed the extension of interest rate subvention of 2% on pre and post shipment credit, the additional fund of Rs.1100 cr. for refund of terminal excise duty and additional allocation of Rs.1400 cr. to clear the entire backlog in the TUF Scheme, which would enhance cash flow of the exporters. In this connection, he recalled his recent meeting with the former Finance Minister who had in principle agreed to consider additional allocation for the TUFS fund and the Interest rate subvention.
Mr. Velayutham has also welcomed the refund of service tax on services provided by C&F agents to exporters and also the increase in threshold limit of refund of service tax paid by exporters on foreign commission agent services from 2% of FOB value to 10% of FOB value.
Government's move to provide back-up guarantee to ECGC to the extent of Rs.350 crore will also help the exporters in getting more orders from the buyers in the developed markets such as US and EU, even though the demand in these markets has declined substantially.
Appreciating the government for taking up the cause of medium, small and micro enterprises (MSMEs) sector, he said that various measures announced would definitely support the growth of Indian textile industry which is predominantly in the SME segment.
The decision to permit availment of drawback benefit simultaneously with refund of service tax paid in respect of exports was a long standing demand of the exporting community and Mr. Velayutham appreciated the positive decision taken by the Government in this regard.
While the steps taken by the Government would lead to easing of liquidity/credit needs of the exporters Mr. Velayutham appealed to the Government to consider increase of incidence of duty drawback and DEPB as the industry is eagerly awaiting the announcement in this regard. Pointing out that China, the largest textile exporter is supporting its textile sector in a big way and has already increased export tax rebates from 14% to 17% with effect from 21/11/2008 aimed at reducing the impact of the global economic slowdown, he urged the government to announce the increase in Duty drawback/DEPB as the markets once lost are difficult to recapture.
He also pointed out that the textile industry was looking towards a moratorium on the loans for a period of 2 years which had been obliquely addressed in the growth stimulus package announced by the Reserve Bank of India on 6th December 2008. He requested the Reserve Bank to clarify the matter explicitly so that the textile industry could face the challenges of the economic slowdown.
Cotton Textiles Export Promotion Council