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Industry ‘desperately appealing’ for extension of loan moratorium

LN Revathy Coimbatore | Updated on August 06, 2020 Published on August 06, 2020

A knitwear export unit in Tiruppur   -  The Hindu

“With no signs of industrial revival yet, withdrawal of extension would prove a death knell for the industry”

The uncertainty over extension of the loan moratorium given as part of the Covid-19 relief package is keeping industry stakeholders on tenterhooks. With no signs of industrial revival yet, industry insiders state that the withdrawal of extension would prove a death knell for the industry, blow to the thousands of workers and huge economic setback for the country.

With just three weeks left for extension of deadline, industry associations have individually and collectively, started to impress upon the government the crucial need for extension of the loan and interest moratorium till the end of the current fiscal.

‘Worrying signals’

“Recent signals from select bank chieftains against extension of loan moratorium for a further period is silently killing us; such a step would prove detrimental for the banks and derail economic growth,” said Raja M Shanmugham, President, Tirupur Exporters’ Association.

“Though most of the garment making units commenced operations from May 6, it took 2 -3 weeks to settle, by which time the migrant workers had started to return to their home towns and resumption of operations were allowed only partially. This coupled with order cancellation/ deferment almost killed us, when the government came to the industry’s rescue by announcing various sops.”

“Three months have gone by (between May and now) but we are struggling still, functional in name only. The State Government’s restriction on movement of people between districts is further hampering industrial activity and growth,” said Shanmugham.

While seeking extension of loan moratorium, the TEA President suggested that the accrued interest could be partly secured by the government through extension of interest subvention, partly by the industry and the banks on their part – should work on sustainable factors instead of profit. “Moratorium though is a must,” he emphasised.

‘Peak demand coming’

When asked about the order position, he said “June, July and August - is a lean period for the garment exporters. Orders are expected to surge from the end of this month. Signals are clear, enquiries are there, but the sector has to become fully operational. We are operating at 35 – 40 per cent capacity. The government and bankers should understand the problems faced at the grass root level. Any delay in the extension of the moratorium could be disastrous.

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Published on August 06, 2020
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