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BOB Capital Markets would make a presentation to the Inter-Ministerial Committee on the textile industry's plight and its demand for a debt restructuring package on May 18, Textile Secretary Ms Kiran Dhingra said.
After visiting Tirupur and the textile weaving park at Palladam near here over the last two days, Ms Dhingra, while conceding that the industry was in dire need of financial support, told industry captains that she could not assure much at the present juncture, except to say that her team would present the facts to the Finance Ministry.
“The outcome will be known by end May”, she added
The issue of debt restructuring has engaged the attention of the Government over the past few months. Besides industry associations, the textile ministry too had taken up the issue with the RBI and the Ministry of Finance.
A study report formulated by the Chairman of Bank of Baroda needed to be corroborated by a further study based on industry-specific inputs. BOB Capital Markets undertook this study, and presented the draft report to the Government for consideration. The presentation of this report to the Inter-ministerial committee is slated for May 18.
Ms Dhingra further said that the report also contains information about working capital erosion following last year's cotton policy. “We are hopeful that this issue will get noticed,” she added.
TUF scheme
Reverting to the industry's demand for continuation of the Technology Upgradation Fund (TUF) Scheme, she said: “TUF will continue at least for the time being. There is greater emphasis on support to the weaving, processing and value added downstream sectors of textile manufacture in the restructured TUF scheme. But this restructured scheme did not get the envisaged response, particularly in the last year of the 11th Plan Period, possibly due to weakening macroeconomic situation.”
“If the pick-up in TUFS off take does not improve in 2012, we will seek to re-evaluate and restructure TUFS to make it more attractive,” she said.
The Ministry meanwhile has recommended extension of the TUF scheme in the 12{+t}{+h} Five Year Plan with an allocation of Rs 15,886 cr.
She said: “We do not intend to provide a split scheme to processing beyond TUFS and we are fairly sanguine that even in processing, we will be given more importance in terms of encouragement and assistance in the 12th Plan, than under TUFS or any other scheme.”
On Integrated Textile Parks, she said the Ministry had announced the setting up of 21 textile parks apart from the 40 textile parks, for which funds have already been sanctioned. “Out of the 40, 24 parks are operational and 12 are nearing completion.”
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