Keeping in view the forthcoming second fiscal stimulus package, the Federation of Indian Chambers of Commerce and Industry (Ficci) has urged the government to pay attention towards the textile sector that has witnesses a negative growth in the year 2008 and has suggested a slew of measures for the same.
According to Ficci, keeping in view the decline in index of industrial production (IIP) for textiles in September at 4.9% and -7.1 % in October 2008, one of the major change that the government should make is to allow liberal rescheduling of term loans taken by textile firms by permitting deferment of eight quality installments of the principal amounts. Without such a rescheduling, most of the loans run the risk of turning into non-performing assets (NPAs), creating serious problems both for the industrty as well as the banking sector. The period for repayment of technology upgradation fund scheme (TUFS) loans has to be extended from current 10 years to 12 years in order to accommodate the rescheduling.
Ficci is of the view that the entire subvention of 4% on export credit withdrawn from October 1, 2008 needs to be reinstated, atleast for a period up to March 31, 2009. There is a need to provide naptha, furnace oil and high speed diesel (HSD) to captive power plants of textile units without customs or excise duty.
Further, it has been felt that there is a need to restore the duty drawback rates that prevailed before the reduction effected in September 2008 and also refund the state level duties of 4-6%.
The packing credit for cotton purchase may be allowed liberally at 7% interest, against a margin of 10% and for a period of nine months. Also, all procured cotton should be sold promptly to Indian mills at international price or 10%below the procurement price.