Chennai: Hit by the slowdown, the credit exposure of the textile sector is down 7.8 per cent from March levels and 4.6 per cent from last year levels.
Credit exposure to the textiles sector declined to Rs 1,87,677 crore in October 2019 from Rs 1,96,818 crore in October 2018. In March 2019, the exposure stood at Rs 2,03,549 crore,
“Overall global growth slowdown impacted the growth of most of the domestic sectors, including textiles, and the subsequent improved demand and profitability will be partly countered by sticky working capital requirement,” Union textiles minister Smriti Zubin Irani said.
According to the industry data, overall textile exports have been shrinking month after month for quite some time. Though every segment in the textile value chain was affected, yarn exports had shrunk to almost half a few months back.
The industry has been going through a tough time since the introduction of GST. Delay in GST refunds had led to a working capital crunch in the industry. The discontinuation of rebate of state levies also hit the industry.
On the other hand, things were not quite rosy in the international front. The global slowdown had hit the off-take by key buyers. The entire value chain was affected by the slowdown. Increased import of cheaper products in certain segments also had an impact on the industry.
The minister claimed that the government has made a capital infusion of Rs 1,500 crore in the sector in 2019-20. She said that the government also has implemented Pradhan Mantri Credit Scheme for powerloom weavers, reduction in custom duty for wool fibre, wool tops, extension of benefit of reduced corporate tax rate, new SFURTI clusters to help artisans, introduction of automated GST module, one nation one grid power sector tariff and structural reforms, simplification of tax-paying procedures and announced ROSCTL for apparel and made-ups exports.
However, these measures have not increased the credit off-take of the industry as well as the exports....