M Karunanidhi seeks Prime Minister Manmohan Singh's intervention over textile debt restructuring

CHENNAI: DMK chief M Karunanidhi today urged Prime Minister Manmohan Singh to direct RBI to issue necessary notification for the Rs 35,000 crore debt restructuring package for textile industry announced by the Centre last month, saying any further delay would lead to a large number of textile units and SMEs becoming non-performing assets (NPAs) by June 30.

"Though the Finance Ministry announced the package on May 29, 2012, the Reserve Bank of India is yet to issue a notification which would enable individual banks to consider the applications of the textile units which need restructuring facility," Karunanidhi, whose party is a key ally of UPA, said in a letter to Singh.

He said the notifictaion was "essential" to avoid NPA as most of the textile units had already availed the first restructuring facility announced in 2009.

Karunanidhi said Tamil Nadu accounted for one-third of the country's textile business and the survival of several lakhs of workers, handloom weavers, cotton farmers and garment workers depended on the performance of the textile industry in the state.

"Therefore, I, personally request you to direct the RBI to issue the notification immediately failing which several hundreds of textile units and thousands of SMEs (Small and Medium Enterprises) would become NPAs by June 30, 2012," he said.

Government decided to restructure bank loans of the sector to give a relief to the debt-trapped textiles industry, which has been hit by a sharp fall in cotton yarn prices and poor domestic and global demand.

The total outstanding debt of textiles sector is Rs 1,55,809 crore of which debt of Rs 35,000 crore would be restructured.