Vaghela seeks sops for textile industry

NEW DELHI: The textile ministry has demanded a bailout package for the textile sector, which is facing problems due to the slowdown in the US and Europe.

Textile minister Shankarsinh Vaghela said a exports fell from October this year and there could be a drop in the overall target for 2008-09. The ministry had targeted a 20% growth in the current financial year. ���The global slowdown may stagnate exports growth,��� said joint secretary J N Singh. Total export may be at the same level as that of the last year, he added.

The ministry has wrote to the Prime Minister���s Office (PMO) and the finance ministry, asking them to provide interest subsidy to the industry so that bank credit is available at 7%. It also asked for increasing the duty drawback rate to 4% from the present 2% and reducing the margin money requirement to 10% from the present 25%. Margin money is the amount a borrower needs to have with himself before applying for a loan.

���We have recommended a detailed package for the industry. The recommendations are in accordance with the industry demand. Now, it is up to the PMO to take a final call,��� Mr Vaghela told reporters here.

The ministry has also asked for a Rs 2,600-crore package to help the handloom cooperatives. The package includes a waiver of loans for handloom cooperatives and loans at concessional interest rate of 7%.

���We want the government to treat this sector on a par with the agriculture sector,��� Mr Singh said. For the first five months of this fiscal, the sector has witnessed a growth of over 11% in textile exports although there has been some slowdown in recent months, he added.