Tamil Nadu - Coimbatore   

Continue export incentives

COIMBATORE: The Southern India Mills’ Association has appealed to the Centre to continue the interest subvention on export credit.

Association chairman K.V. Srinivasan has said in a release that the Reserve Bank of India granted incentives to the exporters by continuing the interest subvention on export credit till March 31, 2009 and extended the ceiling on interest rates up to October 31, 2008 to compensate the impact of rupee appreciation against the dollar.

Consequent to the strengthening of the dollar, the apex bank announced termination of the interest subvention benefit with effect from September 30 this year.

“The proposed move will be detrimental to the health of the textile industry,” he said. The industry was passing through an unprecedented recession due to factors such as 45 per cent increase in raw material cost, hike in bank interest rates and abnormal increase in transport and fuel costs. Tamil Nadu, Andhra Pradesh and Maharashtra were facing severe power crisis.

The power shortage in Tamil Nadu was 35 per cent to 40 per cent. Further, there was a shortage in supply of High Speed Diesel Oil and the oil companies were rationing the quantity to 80 per cent of the previous year’s consumption.

In such a scenario, the Centre should continue the export incentive and the duty drawback rates at the current levels for the rest of the fiscal to sustain the export competitiveness of the Indian textile industry. Competing countries such as China and Pakistan had increased the export incentive for the industry to sustain its competitiveness. The research and development assistance provided to the textile sector had been reintroduced by Pakistan and China had increased the Value Added Tax refund from 9 per cent to 13 per cent for synthetic products and from 11 per cent to 13 per cent for other products.

The Centre should help the domestic industry by continuing the export incentives, he said.

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