Textile industry has welcomed the Reserve Bank of India’s (RBI) decision of framework for restructuring MSME debt, as this step will benefit the industry.
Along with this decision, RBI has also kept the repo rate unchanged (currently it is 4 per cent). It has tweaked priority sector lending (PSL) norms to include loans for start-ups.
However, RBI did not say anything about extending moratorium, which was industry’s major demand.
“We welcome RBI and finance ministry’s announcement providing a framework for restructuring of MSME debt. We estimate around 30-40 per cent of companies in textile sector (based on the coverage of survey of 1,800 companies whose liquidity position is precarious) would benefit immensely through the implementation of restructuring scheme and this could kick start a revival for the textile industry itself,” said Prabhu Dhamodharan, Convenor, Indian Texpreneurs Federation (ITF), Coimbatore.
He also added that the Government should include this scheme for MSMEs as per the revised definition. It would enable a comprehensive coverage of companies and this change is much needed for the spinning sector to get eligibility for the scheme.
Welcoming the RBI’s decision to extend the provision of restructuring of MSME loans, Apparel Export Promotion Council (AEPC) Chairman Dr. A. Sakthivel requested the Government to immediately roll out its recent decision to widen the scope of emergency credit.
“This is a very timely decision as thousands of SMEs are facing severe financial crisis and the extension of the provision to restructure MSME loans for borrowers with loan outstanding up to Rs. 25 crore till 31 March 2021 will give a fresh lease of life to many,” he said.
