A recent press report said that the Textiles Ministry is working on a plan to restructure the loans borrowed by the textiles units from the government at concessional interest rates. The restructure of loans borrowed is expected to give relief to the textile units.
According to an official statement the restructuring plan might consider moratorium on repayment of TUFS (Technology Upgradation Fund) loans, working capital assistance and interest subvention on export of textiles and clothing.
Reports said that Mr. Anand Sharma Commerce and Industry Minister, who holds additional charge of the Textiles Ministry, had called the industry representatives for consultations with in this regard. He is also expected to announce an export promotion package in the Foreign Trade Policy in the near future.
Reports also said that the restructuring plan was being prepared by Textiles Ministry in consultation with the Finance Ministry and the Reserve Bank of India. The plan is expected to include working capital assistance. The loan amount given out under TUFS till June 2010 is about Rs 74,000 crore. The industry also receives five per cent interest subsidy for modernizing the machinery under the scheme
Mr. D K Nair, Secretary General of the Confederation of Indian Textile Industry (CITI) said that the industry was suppose to repay Rs 14,000 crore annually, but is unable to meet the obligation due the losses. He also said that the industry was passing through difficult times.