The Hindu Business Line : Vaghela hints at relief for rupee-hit textile exporters

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Vaghela hints at relief for rupee-hit textile exporters

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Interest subsidy outstanding under TUFS may be released

Mr Shankar Sinh Vaghela

Tirupur (TN) June 7 Textile exporters, hit by the rising rupee, can expect some early relief from the Government, according to the Union Textile Minister, Mr Shankar Sinh Vaghela. Talking to newspersons here on Thursday, Mr Vaghela said that the textile export sector is among the worst hit in the rupee-dollar turmoil and his Ministry had taken up the issue with the Prime Minister and the Finance Minister for necessary intervention and relief. Declining to reveal the contours of the relief, Mr Vaghela said "we may get some announcement by next week or so".

The Minister's observation comes in the wake of widespread anxiety of textile exporters who, upset over the unrelenting rupee appreciation against the dollar, had been pleading for intervention to check the value loss. Among the measures sought by them are cut in interest rate for export finance, raising the duty drawback rate to neutralise value loss suffered in exports by shippers and early RBI intervention in the forex market.

Mr Vaghela also hinted at the possibility of the Government initiating steps to release the outstanding interest subsidy due to the textile/garment companies for their borrowals under the technology upgradation fund scheme (TUFS). Across the country, the outstanding interest subsidy for the TUFS loanees has remained uncleared for the past six months or so.

The Union Minister felt that textile and clothing exports to the US and the EU had showed a decline ranging from four to six per cent compared to the previous year, though the decline was not in rupee terms. This might be partly due to the overall downward trend in imports across-the-board in those countries and partly due to the exchange rate fluctuations.

On the proposed changes to TUFS, the Minister said the need to modify the TUFS allocation was felt because most of the benefits were cornered by largest investments and specific sectors such as spinning. To make the scheme need-based, it was now proposed to cap the investment or the investment/interest subsidy eligibility so that sectors like processing, technical textiles and powerlooms would get due attention, he added.

The Minister was here to inaugurate a new trouser plant of the Royal Classic group.