A day after meeting finance minister Pranab Mukherjee, the 25,000-crore strong textile export sector is optimistic on getting sops which can bail out the ailing sector of financial crisis. Exporters who have seen a sharp fall of 33% in the past seven months, probably the highest in May, in their export targets are now focusing on newer markets like Latin America, Japan, New Zealand and South America.
Says Amit Goyal, president, Confederation of Indian Apparel Exporters “Exporters have asked for a Rs 5,000-crore market development and other tax benefits which if come into existence will help the exporters target newer markets since the US and the EU which constituted over 60% of the exports have saturated. If we get incentives from the market development fund in the form of concessional air travel, sops for participating in international trade fairs, the sector which has contracted in the past few months will head northwards in terms of growth.”
An exporter from Tirrupur, Tamil Nadu adds that apart from the bailout package, the sector needs tax benefits and also, the moratorium period for fresh loans procured should be three years before we start paying the principal amount.
Due to production slowing down against the backdrop of low export demand, over 10,000 workers lost jobs in south India alone. However, Dayanidhi Maran who has just began his tenure as the minister of textiles has promised to create 10 million employment opportunities over the next five years in the labour intensive sector, which is witnessing job losses because of shrinking global demand.
Further, the minister also said that attracting investments would be his thrust area to push industry growth rate to 8-10%, from the current level of 6%. Towards this, the ministry plans to attract investments worth Rs 1,55,000 crore over the next five years.
During the last UPA regime, the textile industry attracted a total investment of Rs 1,04,506 crore in four years till March 2008. But a majority of this investment was through incentive schemes like Technology Upgradation Fund Scheme (TUFS), which provided interest subsidy on loans taken by firms.