The Hindu : Tamil Nadu News : Tirupur knitwear sector to cut workforce

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Thursday, Jan 08, 2009
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Tamil Nadu

Tamil Nadu

Tirupur knitwear sector to cut workforce

R. Vimal Kumar

Tirupur: The three-lakh workforce in the knitwear cluster here looks to get thinner soon, as the ‘Tirupur knitwear Inc.’ plans for a cut in jobs at the rate of about 4,000 a week over the next few months starting last week of January. Reasons: A 20 per cent decline in orders (value wise) from foreign buyers during this fiscal till December 31 vis-a-vis corresponding period last fiscal owing to global recession and a ‘non-supportive’ fiscal stimulus package announced by the Union Government a few days ago to revive the knitwear industry.

A. Sakthivel, president of Tirupur Exporters Association, told The Hindu that retrenchment of workers at this alarming rate would become imperative to cut costs if the Government did not respond immediately to the requests of the exporting fraternity for tax sops to help us wriggle out of the impact of global recession. The exporters’ expectations to get revivers from the Government ‘crashed’ following the announcement of second volume of stimulus package by the Centre a few days ago in which annuities were not allocated for textile industry.

“The package has been a disappointment as our requests for exemption of exporters from the purview of service tax as well as Fringe Benefit Tax and enhancement of duty drawback rate for cotton knitwear garments to 12 per cent remain unaddressed,” Mr. Sakthivel said.

Similarly, requests for imposition of two-year moratorium on payment of term loan and interest, five-year Income Tax holiday and an increase of interest subvention by another 2 per cent too were not considered in it.

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