The Government decided not to extend two per cent interest subvention for readymade garments
Tirupur: The Tirupur Exporters Association (TEA) has submitted a memorandum to the Union Finance Minister Pranab Mukerjee requesting the Government to extend the coverage of two percent interest subvention on packing credit for readymade garments in 2010-11 also.
The appeal was made after the Government decided not to extend the facility in the case of readymade garments for the 2010-11 financial year, in the Union Budget.
The two percent interest subvention now provided by the Government on pre-shipment and post-shipment export credit for all labour intensive export sectors including the ready garments was applicable only up to March 31.
In the coming fiscal, the two percent interest subvention would be given only to handlooms, handicrafts, carpets and small and medium enterprises (SMEs) with readymade garments excluded from its purview.
TEA president A Sakthivel pointed out that since 40 percent of the readymade garment units in Tirupur knitwear cluster would not fall under the SME sector, the firms could not even claim it under SME category also thus depriving them the facility altogether.
“Considering that readymade garment manufacturing sector is still facing the demand compression in the global market and facing stiff competition from countries like China, Bangladesh, Indonesia and Cambodia, the Government should reinstate the benefit of two percent interest subvention to the sector once again," he said.