Paper ind seeks Rs 3,000 cr for modernisation

Citing financial crunch, rising input costs and low capacity utilisation, paper industry has sought Rs 3,000 crore from the government for modernisation of mills under the Technology Upgradation Fund (TUF).

"An amount of Rs 3,000 crore is required for the upgradation and modernisation of the mills...," Indian Agro & Recycled Paper Mills Association (IARPMA) said today.

Presenting pre-Budget memorandum to the government, IARPMA Secretary general PG Mukundan said there are 700 paper mills in India and "less than the above stated amount may not help the industry achieve its objectives under TUF scheme".

IARPMA has sought continuation of 4 per cent excise duty under the government's stimulus pacakages, which were announced to tackle the global economic slowdown, and also called for removal of customs duty on waste paper imports.

Besides, Mukundan said banks should restructure industry's term loans and other debts before March end, to help avoid paper mills falling under the NPA (non-performing assets) category.

IARPMA's other demands include 30 per cent increase in working capital on case by case basis, 25 per cent subsidy for setting up and upgradation of effluent plant and a cap of 15 per centmargin on working capital for two years.

Mukundan said the industry was concerned over growing raw material shortages, rising input costs, reduced capacity utilisation, dumping of certain grades of paper by China and Indonesia and tehnological obsolescence.