Credit and Finance for MSMEs: TEA in a press statement to Nirmala Sitharaman, Union Minister of Finance has said that 20 per cent of existing credit should be provided to bailout the Tiruppur knitwear garment exporting units from the ongoing liquidity crisis.
Credit and Finance for MSMEs: Tamil Nadu’s textile centre, Tiruppur Exporters’ Association (TEA) on Saturday appealed to the union government to announce the Emergency Credit Line Guarantee Scheme (ECLGS) specifically for Garment Sector micro, small and medium enterprises (MSMEs), as per a report by the Knowledge and News Network India.
The association in an official press statement to Nirmala Sitharaman, Union Minister of Finance has said that 20 per cent of existing credit should be ensured to rescue the Tiruppur knitwear garment exporting units from the ongoing liquidity crisis. Issues like fewer booking orders, delay in receiving the payment, non-acceptance of booked orders and deferment of shipment were the major precursors of the crisis.
TEA president, Raja M Shanmugham highlighted that at a time when Tiruppur Knitwear Exporting MSMEs have been struggling to escape the double whammy of the COVID pandemic and cotton yarn price hike, the Russia-Ukraine War has altogether worsened the situation in the European Union, United Kingdom and United States of America markets.
Talking about the adverse conditions of Tiruppur Knitwear Exporting MSMEs, Shanmugham said that he apprehended the sustenance of these businesses.
The association has also requested Reserve Bank of India (RBI) Governor Shaktikanta Das for relaxation in Non Performing Assets (NPA) norms to the MSMEs when the overdue timeline exceeds 90 days and appealed not to classify them as NPAs.
Additionally, TEA has also issued letters to the respective bank’s Chairman/Managing Director (MD)/Executive Director (ED) to underline the ground reality of the situation Tiruppur Cluster is currently facing.
The association is hopeful that the government will come forward to protect MSMEs and its employees, the report said.
Also Read: Govt looking to reduce turnover threshold for corporates to get onboard TReDS: Addl DC MSME Ishita Ganguli Tripathy
Importantly, TEA in September has requested Tamil Nadu’s Chief Minister M.K. Stalin to reassess the Power Tariff Hike and reduce it to save Tiruppur’s Knitwear Industry.
Earlier in May, the association urged the State Bank of India (SBI) to help MSMEs deal with the liquidity crisis, as an unprecedented surge in cotton prices pushed the knitwear sector in dire situation.