Stimulus package: knitwear exporters seek more concessions

Staff Reporter

Tirupur: The knitwear exporters here have sought more concessions from the Centre in addition to the sops announced by Prime Minister Manmohan Singh in the fiscal stimulus package to help them overcome the impact of global meltdown and sustain the exports.

The textile manufacturers wanted the Centre to enhance the total interest subvention to four per cent with retrospective effect from October 1, 2008, and introduce a seven per cent packing credit interest across the board.

Besides, exporters should be exempted from the purview of service tax as well as fringe benefit tax instead of giving refund of tax paid on few select services.

A moratorium from the payment of term loan and interest should be enforced considering the economic crunch encountered by the textile exporters here owing to decline in demand in Western Markets.

In a memorandum to Dr. Manmohan Singh, president of the Tirupur Exporters Association A Sakthivel justified the need to incorporate the above said demands in the second slice of stimulus package.

He pointed out that the second phase of the package should be brought out without any delay, failing which the textile sector could witness a 25 per cent deceleration in growth this fiscal and flight of orders to other countries.

“Our competitor China has increased the Value Added Tax refund rates from nine per cent to 13 per cent for synthetic textile products and from 11 per cent to 13 per cent for cotton products,” he said.

Similarly, Pakistan had announced many sops for research and development activities in the garment sector. “Hence, the Central Government should come to the rescue of textile exporters here before the competitors penetrate into our customer base,” Mr. Sakthivel said.