Provide wage support, save our textile industry: Telangana to Smriti Irani

In a letter to Union Textile Minister Smriti Irani, Telangana Municipal Administration and Urban Development Minister KT Rama Rao has urged for cooperation to protect livelihoods of people in textile industry.

"Consumption patterns across national/ international markets will change in post-Covid world, e.g. more spending will be on healthcare, resulting in higher opportunities from healthcare institutions and also the technical textiles segment which caters to medical textiles. Retail channels will shift more towards online than brick and mortar stores, which point to need for fast fashion and quicker turnaround at the factory. This points to better integration of the segments i.e. having integrated textile zones to improve efficiencies," said KTR in the letter.

It further read, "Providing wage support of up to 50 per cent of wages, contingent on continued employment of the workforce. This support can be given for a period of up to 6 months, in the form of a long-term loan which the industry would need to repay in instalments after a stipulated period."

Urging for statutory payments, he said, "Allow the industry a one-time extension of 3 months for the deposit of statutory dues of PF and ESI. This will release some cash for the industry."

"Facilitate higher temporary credit facilities (up to 30 per cent of current limits) to meet the cash losses during this slowdown, so that it will enable the industry to meet its obligations towards its vendors and statutory payments, so that the entire supply chain is protected. The Govt of India could consider funding this through a concessional line of credit so that the banks are adequately supported, and the funds return to the Government in due course," it read.

The letter further read, "While the RBI has already announced measures to improve liquidity and reduce the interest rates, this can be further augmented by a complete interest waiver or an interest subvention scheme of 2-3 per cent on all loans (including working capital credit) availed by the sector as has been done in the past under TUFS. Further, a special moratorium of 1 year may also be considered."

In order to support the handloom sector in these difficult times, the Minister said that steps should be taken to enable a wider market for the piled-up handloom fabric and finished products on national and international e-commerce platforms. "This could also be supported through institutional buying by Govt of India owned corporations like KVIC, Cottage Industries Emporium, etc," he said.

"Further, in order to encourage faster reboot of the sector, the Centre could consider 50 per cent yarn subsidy across the handloom industry. As a special case, the GST Council should also consider complete waiver of GST on handloom products for a period of 2 years to boost the sector," he added.

On the manmade fibres, KTR said, "Globally, the proportion of manmade fibres in total fibre consumption is more than natural fibres, unlike in India. However, the trend in India is moving towards manmade fibres with growth of segments like fashion wear, active wear, etc., in line with global trends. Further, the growth of technical textiles will also require synthetic materials. New investments are more likely to be in these segments. To support this, correcting the inverted duty structure under GST on man-made fibres would be another strategic step required."

The Minister also said that in order to enable the prospective FDI investors to look at India more favourably, it will be necessary to provide some form of support towards wage cost and power cost, which are two major factor costs for the industry. He suggested the Centre to "reintroduce the scheme for supporting the employer's contribution towards PF, ESI, as done earlier for the apparel and made-up sector, and extend it for all segments; and provide some for an additional wage subsidy for a limited period linked to certain commitments from the industry.