The CMAI has called for complete elimination of high value entitlement (HVE) allotment, revert to 80 per cent past performance quota (PPQ) and 20 per cent first come first serve (FCFS), abolition of entitlement transfer system (ETS) or continuation of parallel transfer system and extension of quota period up to September 30.

It has also strongly said that there should be no compulsory lapsing of unutilised quota at the end of May so that it would facilitate orderly exports of garments.

According to Premal Udani, president of CMAI, the new policy has more or less remained unchanged on the positive side while snatching certain flexibilities which the industry enjoyed till the new policy was announced.

The trade which was looking forward to simplification and rationalisation of quota policy find themselves further divided into fragmented quota system.The trade body which had strongly requested for PPQ and FCFS basis to be the only system of allotment, find all the five systems of allotment very much in place much to their chagrin.

By continuing NQE (non quota entitlement), NIE (new investor entitlement) and HVE, no simplification has been made. It is a pity that when the country is talking of phasing out quota, the government has persisted with fragmentation, the release says.

Moreover, there is no rationale for the 15 per cent NIE as manufacturers will have to modernise to survive even without any incentives. They are already getting sufficient incentives through the Technology Upgradation Fund (TUF) Scheme and other benefits granted by the government. Therefore allotment of quota as an incentive is incorrect, Udani has said in the statement.

Another drawback that has been carried along is the HVE system of quota. The quota makes no sense since all PPQs are issued on value basis only. This means that in effect quota has been reduced to 65 per cent.

ETS system has already proved a collossal failure. According to Udani, the purpose for which it has been introduced defies all logic.

The sharp increase in quota premia in the early part of the current year was a direct fallout of the implementation of ETS system, the association says.

Moreover, the newly introduced two period quotas also add to the already complicated quota system. The quotas expiring on May 31 have either to be used by June 21 or it would lapse. This aspect also defies logic, CMAI claims.

It does not take into account seasonal exports like winter garments falling under category 5. These goods necessarily have to be shipped only in July/August, the release says.