Seeking intervention of the Prime Minister Manmohan Singh for a moratorium on loan repayment, the crisis-ridden textile industry has said immediate government measures can help it save 10 lakh (1 million) jobs and create additional 25 lakh (2.5 million) employment opportunities.
The textile industry, the largest employer after agriculture, has also demanded increased tax refunds on exports, scrapping of import duty on man-made fibres and interest subsidy of four per cent on export finance.
"The textiles and clothing industry can re-employ about one million workers (in 2008-09 fiscal) and create another 2.5 million additional jobs in the next couple of years. . . if the available policy space is used judiciously," chairman of the Confederation of Indian Textile Industry chairman R K Dalmia said in a letter to the prime minister.
Dalmia said the stimulus packages announced in December 2008 and January this year could not pull the industry out of the crisis.
CITI said that the disbursal of Rs 1,400 crore (Rs 14 billion) under the Technology Upgradation Fund Scheme in the second bailout package was only part of an outstanding due to the industry of Rs 2,000 crore (Rs 20 billion) till March last year.
It has said a two-year moratorium on the repayment of term loan (principal amount) should be allowed so that the overdues do not lead to borrowers defaulting with the banks.
The industry, which currently gets an interest subsidy of 2 per cent on export credit, has sought additional 2 per cent subvention.
The duty drawback on exports should be increased to the September 2008 level of 4-12 per cent, it has said.
To facilitate cheaper imports of man-made fibres, CITI has sought scrapping of the duty at five per cent on purchases from overseas market.
To tide over the high input costs following an over 40 per cent rise in the minimum support price of cotton for 2008-09, the industry has demanded that all the fibre procured by the government agencies be offloaded at international prices, which are currently cheaper than domestic rates.
"Today our cotton is the most expensive in the world. On top of that we have granted an export incentive of 5 per cent on cotton under the Vishesh Krishi Upaj Yojana scheme. This has created a situation where our competitors will get our cotton at a cheaper price than our domestic mills and use that to hurt our trade," CITI secretary-general D K Nair said.