Coimbatore Export Units Welcomes Stimulus Package By Centre

The labour-intensive textile sector at Coimbatore and the export units at Tirupur hope to benefit from the stimulus package announced by the Centre. “The package is a boon to garment exporting units,” said A Sakthivel, president of Tirupur Exporters’ Association (TEA) and chairman, Poppys Knitwear. While welcoming the 2% subvention on packing credit, he wants it to be raised to 4% subvention since the prime lending rates of the banks are on higher side.

“Though RBI has cut two key short-term interest rates, repo rate and reverse repo rates by 100 basic points, the banks haven’t reduced the prime lending rates,” he said. He said the additional allocation of Rs 1,400 crore in the package for technology upgradation fund (TUF) would help to clear the backlog. Southern India Mills Association (SIMA) chairman, KV Srinivasan welcomed the allocation of more fund amount for the TUF scheme.

It would help to clear the arrears. KPR Mills MD, P Nataraj felt the long pending interest subsidy through TUF schemes could be disbursed immediately as it would help the units to tide over the current financial crisis. He said the 4% cut in Cenvat would mean the machines would be 4% cheaper. Dr Srinivasan also hoped the 4% cut in the ad valorem centavo rate across the board would help reduce the cost of production considerably.

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