The government has approved of a loan worth Rs 35,000 crores to help SMEs in textile industry on a case-to-case basis in order to revive the debt-stressed sector. The decision came out during a meeting of Commerce and Industry and Textiles minister, Anand
The government has approved of a loan worth Rs 35,000 crores to help SMEs in textile industry on a case-to-case basis in order to revive the debt-stressed sector. The decision came out during a meeting of Commerce and Industry and Textiles minister, Anand Sharma with Finance minister, Pranab Mukherjee. This has also come as a welcome move as online business activities of SMEs in the sector has surged by 38.7 per cent this year, compared to last year, says a research report by IndiaMART.
Dinesh Agarwal, founder & CEO, IndiaMART.com during the release of the report said,” We have been closely working with SMEs for many years now. While working on the report, we were able to identify growth areas for SMEs, one of which is the technical textile segment. It has immense growth opportunities to offer to them as this industry is likely to grow to $31.4 billion.”
The report launched by IndiaMART Knowledge Services (IKS), an exclusive in-house research unit for SMEs also highlighted of more active presence of apparel SMEs in metros on internet than in tier II & III cities.The report suggested that export market is expected to touch $43 billion while domestic market will reach $57 billion by 2015.
According to a statement issued by textiles ministry, the finance ministry would examine in consultation with the Reserve Bank of India for a two-year moratorium on term loans, special provision in NPA norms to avoid asset reclassification and working capital eroded to be converted into working capital term loans repayable over a period of 3-5 years, thus providing huge relief to the SMEs operating in textile industry.
The total outstanding debt of the textile sector is Rs 155,809 crore, of which a debt of Rs 35,000 crore needs restructuring.