The Telangana Spinning & textile Mills Association (TSTMA) has sought a two-year moratorium on term loans and conversion of working capital into working capital term loan with the repayment period between three to five years. It has also pleaded for reduction of interest rates for textile mills on term loans to bank base rates.
In a representation made to textile minister, Santosh Kumar Gangwar, the association said any delay in addressing the problems of textile mills would make several hundreds of textile units in the country economically unviable resulting in large scale NPAs in the textile industry. It has asked the government to address its concerns on a priority basis to ensure that mills are not forced to close down due to adverse external factors.
Association’s general secretary, M. Anantha Reddy in a statement said the cotton mills and spinning and weaving sectors of the textile industry have been suffering for the last 18 months due to glut in the export market caused due to policy changes in China and the duty structure in EU, China and the America.
Prices of finished goods, cotton and synthetic yarns have been on continuous decline over last 18 months and have reduced by more than 30 per cent and have completely eroded the margins of Industry. Most of textile units are suffering huge losses between 15 to 20 per cent of turnover and are under severe strain.
The association wanted a cotton price stabilization fund scheme consisting of cotton working capital loan at 7 per cent interest rate (or 5 per cent interest subvention), reduction of margin money from 25 per cent to 10 per cent and increasing the credit limit from three months to nine months.
