New Delhi, Nov 10 (UNI) Even as Prime Minister Manmohan Singh and Commerce Minister Kamal Nath have urged the Indian Incorporate not to resort to lay-offs to protect profits, an industry chamber has sought a bailout package for the highly employment-intensive textiles industry to prevent large-scale unemployment.
Noting that growth of textiles industry has come down from eight per cent in 2005-06 to merely 0.8 per cent in April-August 2008-09, Federation of Indian Chambers of Commerce and Industry (Ficci) warned of large-scale lay-offs if the government did not implement swiftly a special package for the industry.
Pointing out that profitability of Indian textiles industry fell by over 99 per cent in June 2008 quarter and investment in the current year (for April-July) dipped by 66 per cent compared to the year-ago same period, Ficci said a special package has become imperative to save the industry in the current economic crisis.
Among other things, the industry chamber sought moratorium for one year on term loans, increased drawback rates along with export credit at international rates for the textiles industry.
The industry body also sought extension of sunset clause for export oriented units (EOUs) for five years. release of pending funds of last year under Technology Upgradation Funds Sceme (TUFS) and reduction of excise duty on man-made fibres.
Under the the sunset clause, EOUs are entitled for income tax exemptions for a period of 10 years that is expiring by March 2009.
Given the profitability position of textile industry currently, Ficci said it would not be appropriate to withdraw this benefit next year as a result of which tax for EOUs would be around 34 per cent after expiry of the benefit.
It also demanded imposition of 10 per cent Import duty on man-made fibres; and sought seven per cent duty free scrips as a refund of State taxes.
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