When Europe gets cold Tamil Nadu sneezes. The adage has been proved again as countries like Germany, France and Britain announced lock down due to Covid-19 pandemic leaving nearly one thousand knitwear units in Tirupur gasping for breath.
Despite the Centre’s announcements about various financial packages as part of the Atmanirbhar schemes for the resuscitation of the gloomy industrial sector in the State, the knitwear exporters are yet to come out of the abyss to which they have fallen since the breaking out of the pandemic all over the world. The textile materials manufactured in Tirupur stand out in the global market because of quality and craftmanship. But that has not been successful in reviving the cash liquidity faced by the European end users of Tirupur’s knitwear products, according to Raja M Shanmugham, president, Tirupur Exporters’ Association (TEA).
Shanmugham, a real Raja of the knitwear industry, says the fortunes of the industry could be turned for the better by a few measures which could be ordered by Nirmala Sitaraman, the country’s finance minister. “The second lockdown promulgated in major countries like Germany, France and UK from November, has lead us, mainly MSMEs into a liquidity crisis. In addition to this we are facing another shock in the form of ever increasing price of yarn, our important raw material due to business dynamics. These factors have eroded the competitiveness of the knitwear industry,” Shanmugham, known for his fighting spirits, told The Pioneer with uncertainty written all over his face.
He said measures like Interest Equalisation Scheme which was announced for a brief period of three months , if extended to a period of two years would help in soothing the pain being suffered by the industry. “This will help us to tide over the financial crunch we are facing due to lock down and high yarn prices and also in sustaining the global competitiveness of Brand Tirupur,” said the TEA president.
The TEA in a memorandum to the minister has pointed out that the Remission of Duties and Taxes on Export Products (RODTEP) announced in January 2021 to replace the ROSCTL (Rebate of State and Central Taxes and Levies) has not been operationalised which has put the exporters and MSMEs between deep sea and devil.
“The MSMEs are not receiving the reimbursement of the embedded taxes including electricity tax, Mandi tax, GST on petro-products. The non-disbursement of RODTEP is causing severe liquidity crisis,” said the TEA plea.
Raja Shanmugham pointed out that the Centre has extended ECLGS 3.0 to Hospitality and Tourism sectors by providing 40 per cent of credit outstanding on 28.2.2021. “Being a labour intensive sector and still undergoing a financial stress, we request the Government to extend the ECLGS to apparel sector also by providing additional 20 per cent credit outstanding as like given to other sectors and help us to ease the liquidity crisis,” said Shanmughham.
Tirupur employs more than 6,00,000 workers in its knitwear units and earns Rs 200 billion every year by way of exports.
Published On : 17-04-2021
Source : Daily Pioneer
