Steadily appreciating rupee hits employment the most

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New Delhi, Nov 6 (UNI) With appreciation of rupee adversely affecting the exports, Textile and Clothing business bodies has pleaded the government that revenue earned from imports should be used for immediate reimbursement of the exporters' dues to help running their units without resorting to extreme step of laying off the work force.

Briefing reporters here today, captains of the textile industry said that textile and clothing industry is a powerful tool for bringing about inclusive growth by providing gainful employment and steady income to the millions, is engulfed by the unprecedented threat triggered by a rising rupee, which eroded this sector's competitive advantage in the export market.

Mr Manikam Ramaswamy, Past President of Southern Indian Mills' Association (SIMA), said that ''textile and clothing units across the country have cut back the production and some are even contemplating exit, which has already adversely affected not only the incremental growth in employment in the sector but also the existing jobs''.

He further said that in April 2007, export of textile products declined by 18.25 per cent and job loss by 35,000 as against the growth between 15 to 20 per cent in 2006.

''In the subsequent months, this figure would have increased considerably since the pace of appreciation of rupee was sharper.

Industry estimates say that total loss of jobs during the year will be close to 5 lakhs,'' Mr Ramaswamy added.

The current rupee crisis has adversely affected the tempo of growth of the industry in general and exports in particular due to the inherent handicaps of the Indian industry vis-vis its competitors in Asia, such as low productivity, costly and erratic power supply and other infrastructure bottlenecks.

Mr Shishir Jaipura, Vice Chairman, Confederation of Indian Textile Industry (CITI), said cotton exports from the country are increasing and the finished products from Pakistan, Bangladesh and China are coming back to India giving harsh competititon at our own soil from raw products imported from here.

Mr Jaipuria mentioned that now there is no relief from Income Tax and State levies are imposed on exporters putting burden on the industry and these should be reimbursed without any delay to all the exporters.

Mr Vijay Garwal, Chairman, Apparel Export Promotion Council (AEPC), said that the present state level duties account for 5 to 8 per cent of the job. A mechanism should be devised to reimburse this to all the exporters and a dual currency may be devised for the period of 6 months to one year to tide over this unprecedented spike in currency in such a short span of time. Export credit (Pre and Post shipment) should be six per cent.

Mr Agarwal also suggested that the duty drawback revision earlier this year was based on assumption of rupee stabilising at Rs 41 per dollar and in the current scenario the duty drawback should be increased proportionately and refund service tax as recommended in FTP.

AEPC Chairman cautioned that garment sector expects 18 to 22 per cent deline in rupee realisations and job losses upto 6.2 lakh during 2007-08.

Industry body said government earns from imports under import duty, countervailing duty and from state levies which come under the Central Pool and the Government should have any problem in disbursing the required sum to the exporters without delay who earn net foreign exchange for the country.

The associations that jointly took up the issues of the industry at a common platform were CITI, AEPC, Texprocil, MOA, NITMA, PDEXIL, RTMA, SIMA and SRTEPC.


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