AEPC welcomes rate cut, but calls for more relief to protect apparel export industry

Apparel export promotion body AEPC on Saturday said interest rate cuts by the RBI will help the sector deal with the Covid-19 crisis but more financial relief is required for this labour intensive segment.

Apparel Export Promotion Council (AEPC)Chairman A Sakthivel expressed hope that the reduction in repo rate to 4.4 per cent will translate into lower lending rates for both retail and corporate credit, and also encourage consumption and investment.

"Cut in reverse repo rate by 90 basis points to 4 per cent will encourage banks to lend money to productive sectors rather than parking it with the RBI. Also, the cut in CRR by 100 basis points to 3 per cent will improve the much-needed liquidity in the economy," he said in a statement.

The three-month moratorium on EMIs on all outstanding loans comes as a big relief for both corporates and individuals and deferment of interest on working capital is crucial for the apparel export industry which is facing cancellations of export orders and delays in shipments.

However, to help the apparel export industry and its 12.9 million workforce tide over these difficult times, more needs to be done," Sakthivel said.

He suggested that there should be no penalty on advanced forex booking and called for postponement of EMIs by six months to start with.

The government should advise banks to delay declaring a company's accounts as NPA for one year due to the economic fallout as this industry needs immediate relief, he added.

The Council has requestedfor an extension of the interest subvention scheme beyondMarch 31 andextension of the provident fund, ESIand other related benefits for workers of small establishments to apparel workers as well.

He also urged the government to provide relief to the workers by way of contributing wages/salaries for six weeks.