Stimulus to boost textile-apparel sector morale: CITI

14 May '20

2 min read

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The textile and apparel sector, the second largest employment generator after agriculture and which comprises 80 per cent of micro, small and medium enterprises (MSMEs) in India, will definitely get a morale boost through the stimulus package announced by Prime Minister Narendra Modi yesterday, according to the Confederation of Indian Textile Industry (CITI).

The government has changed the definition of MSME by allowing units with investment up to ₹1 crore instead of ₹25 lakh and units with turnover up to ₹5 crore to be called micro units. The investment and turnover limits for small and medium businesses have likewise been raised to allow them to retain fiscal and other benefits. Therefore, small weaving mills will now come under new MSME norms and many garment manufacturers will be benefited, CITI chairman T Rajkumar said in a statement.

The modified MSME criteria will, however, neither encourage technology upgradation in the MSME sector nor help capital-intensive sectors like spinning, independent weaving and processing, he said, as they need greater government support at this critical juncture. As global tenders have been barred for government procurement up to ₹200 crore, it would help MSMEs to compete in government tenders, CITI said.

Rajkumar expected the government to soon announce a special package for boosting exports for all the textiles and apparel products, including cotton yarn and fabric, to grab emerging opportunities and also consuming the surplus cotton that might significantly affect cotton farmers.

He hoped the government would consider the industry’s urgent demand of extending the moratorium for repayment of loans and interest already extended for three months from March 1 for another 10 months, i.e., upto March 31, 2021.

The government should also consider and extend 25 per cent additional working capital without any collateral or margin money for all the categories of accounts other than MSMEs also in the next financial relief package to be announced shortly, Rajkumar added.

Fibre2Fashion News Desk (DS)

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