The Hindu : Business : Textile industry seeks comprehensive package

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Wednesday, Mar 04, 2009
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Textile industry seeks comprehensive package

M. Soundariya Preetha

The allocation for TUF scheme helped clear interest compensation arrears up to
June 2008.

COIMBATORE: The trade facilitation measures and stimulus packages announced by the Union Government have given some relief to the textile and clothing industry. But, what the industry needs is a comprehensive package to overcome the current crisis, according to industry representatives.

The Rs. 325-crore special package for leather and textiles provides two per cent duty credit scrip under market-linked focus product scheme for garment exports (knitted and woven) to the U.S and European Union. It also gives incentive for technical textile exports.

D. K. Nair, Secretary General of the Confederation of Indian Textile Industry (CITI), said the package does not provide any incentive for made-ups, fabric and yarn exports.

Relaxations in the Export Promotion Capital Goods Scheme, issuing duty credit scrips under Chapter 3 and Duty Entitlement Passbook scheme (DEPB) without waiting for realisation of export proceeds and extension of export obligation period against advance authorisation would benefit the industry to some extent.

“But, most of these measures, including those given in the stimulus packages are mainly for exports. The needs of the domestic sector should also be attended to,” said K. V. Srinivasan, Chairman, Southern India Mills’ Association.

The allocation of Rs. 1,400 crore in the stimulus package for Technology Upgradation Fund Scheme (TUFS) had helped clear interest compensation arrears up to June 2008. Even for the June quarter the arrears were not fully cleared.

There would be a backlog of one year again since the next allocation would come only in the next budget, Mr. Nair said.

The confederation organised a meeting in New Delhi on Monday with secretaries of the Union Ministries of Finance, Commerce and Textiles to explain the decline in production and exports and problems faced by the sector.

“These steps announced by the Government are ad hoc measures and are inadequate. These will not help arrest unit closures,” Mr. Nair added.

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