Interviews
FICCI paints grave scenario in meeting with Cabinet Secretary
18 Dec '08
9 min read
•The entire subvention of 4 percent on export credit withdrawn from 1st October 2008 needs to be reinstated at least for the period up to 31st March 2009.
•Provide Naphtha, Furnace Oil and HSD to captive power plants of textile units without customs duty or excise duty.
•A number of T&C units, especially in the SME segment, had been persuaded by banks to purchase Forex Derivatives by explaining their perceived advantages and not sensitizing the units on the risks involved. Such units have now lost huge amounts of money. As an immediate solution to this complex problem, the banks may be asked either to waive 50 percent of the amounts involved or to provide soft loans to the units at nominal interest rate for meeting the expenses.
•In order to address the problems created by unreasonably high MSPs, packing credit for cotton purchase may be allowed liberally at 7 percent interest, against a margin of 10 percent and for a period of 9 months. Also, all procured cotton should be sold promptly to Indian mills at international price, that is, 5 cents below Cotlook 'A' Index (to offset the cost of logistics) or 10 percent below the procurement price.
The measures suggested above will not only help save the huge investments made in recent years by the industry in capacity building, but will also save lakhs of jobs for the poorest in our work force and support farmers by arresting the current decline in cotton consumption in the country.
•Provide Naphtha, Furnace Oil and HSD to captive power plants of textile units without customs duty or excise duty.
•A number of T&C units, especially in the SME segment, had been persuaded by banks to purchase Forex Derivatives by explaining their perceived advantages and not sensitizing the units on the risks involved. Such units have now lost huge amounts of money. As an immediate solution to this complex problem, the banks may be asked either to waive 50 percent of the amounts involved or to provide soft loans to the units at nominal interest rate for meeting the expenses.
•In order to address the problems created by unreasonably high MSPs, packing credit for cotton purchase may be allowed liberally at 7 percent interest, against a margin of 10 percent and for a period of 9 months. Also, all procured cotton should be sold promptly to Indian mills at international price, that is, 5 cents below Cotlook 'A' Index (to offset the cost of logistics) or 10 percent below the procurement price.
The measures suggested above will not only help save the huge investments made in recent years by the industry in capacity building, but will also save lakhs of jobs for the poorest in our work force and support farmers by arresting the current decline in cotton consumption in the country.
FICCI
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