that repeated instances of debt restructuring be declared NPAs, the finance ministry had asked respective banks to consider these cases at their end even though no concession on the NPA front came by.
“Only a few proposals have been cleared by banks now, and around two-thirds of cases are still under consideration. The process will be expedited,” said a senior government official.
The textile industry has now requested the government to consider easing guidelines under TUFS to allow concessions to even those mills whose loans have been declared NPAs due to the second restructuring, Nair said.
The government mainly provides interest subsidy against loans to textile units, apart from capital subsidy as well as limited cushion against exchange rate fluctuation, for investing in new technology at existing units as well as to set up new units with state-of-the-art technology so that their viability and competitiveness in the domestic as well as international markets would be enhanced. The government has allocated R11,577 crore for the 12th Plan period (2012-17) for the TUFS.
Textile mills, which bought cotton at record prices in the marketing year which started on October 1, 2010, were caught off-guard when product prices plunged in April 2011 on poor demand from the United States and the European Union, which account for around 65% of textile exports. Moreover, the government’s restrictions on cotton yarn export at 720 million kg in the 2010-11 fiscal to boost domestic supplies resulted in a loss of R11,000 crore to the textile industry, according to an estimate by CITI.