The crisis ridden textile industry heaved a sigh of relief consequent to the announcement of textile debt restructuring package of Rs.35,000 crores by the Finance Ministry following the concerted efforts made by The Southern India Mills’ Association (SIMA) and Confederation of Indian Textile Industry (CITI).
Though the announcement made on 29th May, 2012, there was undue delay in implementing the debt restructuring package, the reason being non-receipt of communication from the Government to the banks on the issue. This issue was taken up by SIMA and CITI at the Two-Member Inter-Ministerial Committee meeting held on 13th July 2012 when the Committee promised to send necessary communications to the banks.
In a Press Release issued, Mr. S. Dinakaran, Chairman, SIMA has informed that the Ministry of Finance has ultimately sent communications to the Chairman and Managing Directors of all Nationalized Banks as well as the CEO of Indian Banks Association on 12th September, 2012 directing them to take necessary action for implementing the debt restructuring package on a case to case basis as per the data provided by the industry Associations through Ministry of Textiles.
Mr. Dinakaran has stated that though there was some delay in implementing the package, the move by the Finance Ministry would greatly help the textile industry to reach normalcy taking advantage of the improved market conditions.
Since RBI has refused to relax the NPA norms, the units availing the benefits of the debt restructuring package might become NPAs if the restructuring is done for the second time or repeatedly.
SIMA chief has said that such NPA units would become ineligible to avail the TUF subsidy as per the present guidelines. He has informed that SIMA and CITI had jointly convinced the Two-Member Committee chaired by the Textile Secretary held on 13th July, 2012 to pass necessary resolution by the Cabinet so as to enable the affected units to continue to get the TUF benefit to sustain their financial viability. Mr. S. Dinakaran has mentioned that the Association would make necessary efforts to get the TUF subsidy for the NPA units covered under the debt restructuring package.
Mr. Dinakaran has further stated that several hundreds of projects which came during the period between 29.6.2010 and 27.4.2011 are not covered under TUF Scheme. He has added that the Association has been making efforts towards this for the past more than a year to get the TUF benefit for the blackout period. Unfortunately, the Finance Ministry has rejected the genuine plea. He said that the Association would continue its efforts to get the TUF benefit for the blackout period and he has hoped that soon the government would show sympathy on these units and extend the benefit as the TUF has been in vogue without any break since 1999, which has also been extended for the entire 12th Five Year Plan period.
SIMA Chief, Mr. S. Dinakaran has stated that the Association has been taking necessary efforts to address the power crisis and hoped that the State government would soon come out with innovative schemes which would bring the entire textile industry to normalcy.
Source:
http://www.fibre2fashion.com/news/textile-news/newsdetails.aspx?news_id=116059
