The crisis-ridden textile industry sought intervention of the Prime Minister Manmohan Singh for a two-year moratorium on the repayment of term loan. The industry feels that immediate intervention by the Indian government can help the industry to re-employ one million workers and create 2.5 million additional jobs in the next couple of years, media reports said.
The textile industry, the largest employer after agriculture, has also demanded increased tax refunds on exports, hike in duty drawback, scrapping of import duty on man-made fibres, and interest subsidy of 4% on export finance.
R.K. Dalmia, Chairman of the Confederation of Indian textile Industry or CITI, reportedly said the stimulus packages announced in December 2008 and January this year could not pull the industry out of the woods.
CITI added that the disbursal of Rs.1,400 crore under the Technology Up-gradation Fund Scheme in the second bailout package was only part of Rs.2,000 crore that was payable to the industry up to March last year.
The industry, which currently gets an interest subsidy of 2% on export credit, has sought additional 2% subvention, increase the duty drawback on exports to September 2008 level of 4% to 12%, and scrapping of the duty at 5% on purchase from overseas market.
Besides, the industry has demanded that all the fibre procured by the government agencies be offloaded at international prices, which are currently cheaper than domestic rates. This is to tide over the high input costs following more than 40% rise in the minimum support price of cotton for 2008-09.
D.K. Nair, CITI Secretary-General, said today our cotton is the most expensive in the world. On top of that we have granted an export incentive of 5% on cotton under the Vishesh Krishi Upaj Yojana scheme. This has created a situation where our competitors will get our cotton at a cheaper price than our domestic mills and use that to hurt our trade.
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