Telangana Industries Minister K.T.Rama Rao has urged the Centre to facilitate higher temporary credit facilities, up to 30% of current limits, to textile industry so that the units are able to meet obligations towards vendors and statutory payments.
The government of India could consider funding this through a concessional line of credit so that the banks are adequately supported and the funds return to the government in due course, Mr. Rao said in a letter to Union Textiles Minister Smriti Zubin Irani.
He also suggested to the Centre to consider a complete interest waiver or an interest subvention scheme of 2-3% on all loans, including working capital credit, availed by the units as done in the past under TUFS.
A special moratorium of one year may also be considered, he said, adding that RBI may be requested to allow the banks not to downgrade loan accounts by giving a grace period of six months to one year.
In a set of suggestions for the benefit of the handloom, textiles and apparel industry, Mr. Rao said among the short term policy support needed are one providing wage support of up to 50% of wages, contingent on continued employment of workforce. This can be extended for a period of up to six months, in the form of a long-term loan which the industry would need to repay in instalments after a stipulated period. A one-time extension of three months for deposit of statutory dues of PF and ESI can be provided to the industry.
These measures will benefit the workers employed in the sector and provide a source of reassurance for their continued employment, he said.
Among other suggestions, Mr. Rao sought to highlight the need to provide more incentives to exporters; extending the Rebate of State and Central Taxes and Levies (RoSCTL) scheme for apparel and made-ups segment to other segments like yarn and fabric; expediting GST refunds to the industry.
He stressed the need to provide marketing support to the handloom sector, launch of an aggressive ‘Be Indian, Buy Indian’ initiative; provision of 50% yarn subsidy across the handloom industry as well as waiver of GST on handloom products for two years. He suggested replicating Telangana government’s measures to support handloom weavers at the national level, including the detailed census it undertook of handlooms across the State and geo-tagging of all handloom products so that benefits can be provided directly to the weavers concerned.
He called for correcting the inverted duty structure under GST on man-made fibres and transferring subsidies directly to cotton farmers’ accounts through direct benefit transfer (DBT) instead of offering a minimum support price for their produce. This will avoid the distortion of prices of raw material which are inputs to the downstream spinning industry.
Towards attracting investments, he wanted the Centre to launch the Mega Textile Park Policy, support industrial infrastructure creation at a rapid pace. To enable prospective FDI investors to look at India more favourably, he said it will be necessary to provide some form of support towards wage cost and power cost, which are two major factor costs for the industry.