Apparel export industry has thanked the Government for excluding export turnover from MSME definition. In a cabinet meeting, Government finalised decisions related to MSME sector.
Time and again, various trade bodies have requested the Government to remove the turnover criterion for defining MSMEs in the exports sector.
AEPC Chairman Dr. A. Sakthivel said, this decision will propel India’s exports and strengthen the MSME sector, which is key to India becoming self-reliant. Further, the decisions to allow MSMEs get listed and the provision of distressed asset fund for MSMEs will give a major stimulus to the sector, job generation and revival of the economy.
The industry is also grateful for setting up the Rs. 20,000 crore subordinated debt for stressed MSMEs and equity infusion of Rs. 50,000 crore through a fund of funds.
Raja M. Shanmugam, President, Tirupur Exporters Association (TEA), welcomed the change in the definition of Micro and Small units; specifically the upward revision of medium enterprises to Rs. 50 crore of investment and Rs. 250 crore of turnover will be highly beneficial to the Tirupur knitwear garment exporting units.
The industry leaders believe that change in definition will not only help for ease of doing business but will also attract more investment in the garment industry sector and create more jobs.
“We are witnessing steady and bold reforms. These announcements of MSME definition is historic one and will help many companies in the textile sector. We need to accelerate the competitiveness of MSMEs with continuous reforms. Our sincere thanks to the Ministry of MSME and Textile Ministry for bringing the change in the definition of MSMEs and with this, more companies will be eligible for the credit guarantee. Scheme and incision of liquidity will be helpful in revival,” said Prabhu Damodaran, Convenor, Indian Texpreneurs Federation (ITF).
Rajkumar, Chairman, Confederation of Indian Textile Industry (CITI), said that this is the first time the Government has given so much importance to the MSME sector. The Government’s announcement of Rs. 10,000 crore funds for MSME to get listed in the stock market is a welcome measure.
Ashwin Chandran, Chairman, The Southern India Mills’ Association (SIMA), also welcomed the allocation of Rs. 4,000 crore towards distressed fund to bailout MSME units under NPA category and also allocating Rs. 10,000 crore fund on funds to enable the high performing MSME units to get listed in the stock market and gain advantage.
The industry has again appealed the Government to advise banks to provide the intended financial measures to MSMEs expeditiously.
SIMA Chairman has appealed to the Government to consider modifying the definition from “investment and turnover basis” to “investment or turnover basis” to further extend the benefits to the capital-intensive sectors of the textile industry viz., spinning, weaving, processing and technical textiles. This will encourage modernisation and increase scale of operation so that these segments can improve their global competitiveness.
The industry also welcomed the MSP increase of 4.75 per cent for medium staple cotton and 4.95 per cent for long staple cotton that would greatly benefit the cotton farmers and sustain the area under cotton cultivation. The minimum support price for seed cotton (kapas) for medium staple has been increased from Rs. 5,255/- to Rs. 5,515/- per quintal.
On the other hand, some of the exporters are also of the view that as some of the major announcements will be applicable for July 2020, it is very late. The interest rate of distressed MSMEs is also not announced while it is highly important.
CITI Chairman also felt that the Government would soon announce a special package for boosting exports for all the textiles and apparel products including cotton yarn and fabric to grab the emerging opportunities and also consuming the surplus cotton that might significantly affect the cotton farmers in the country.