The Hindu Business Line : ‘Will improve liquidity levels for textile sector’

Chennai, Dec. 7 The bailout package announced by the Government today has enough punch to stimulate consumption. Particularly for the textile industry, it would improve the liquidity levels. “The Government has cleared all pending issues except the duty drawback, which I think the Commerce Ministry would work on,” said Mr Manickam Ramaswamy, Chairman, CII - Tamilnadu State Council, and Chairman and Managing Director of Loyal Textiles.

On the additional allocation of Rs 1,400 crore to clear the backlog in TUF scheme, he said out of the Rs 2,000-crore backlog, the Government announced Rs 300-crore relief a couple of months ago – “though not yet released”. Now, with this, practically all backlogs have been cleared. “However, the Government should implement all this with transparency and speed,” said Mr Ramaswamy.

Besides, the additional allotment of Rs 1,100 crore for full refund of terminal excise duty will also improve the liquidity of the textile industry.

Commenting on the 2 per cent interest subvention for the pre and post-shipment export credit for labour-intensive units, he said, “Though we expected slightly more, this is better than nothing.”

He also said that at a time when most states are reeling under power crisis, the duty cut announced for naphtha import will certainly come in handy. The gesture should also be extended to other fuels for power generation such as furnace oil. Fuels that are not used by the transport industry should be considered as one basket. “I think that was by oversight,” he said.

Interest rates should also come down. “It’s really surprising why no bank has cut rates so far.” The Government must also consider extending at least one-year moratorium on loan repayment for small scale industries who are struggling to repay capital investment loans.

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