Having solidarity with the demonetization decision of Government of India, spinning industry of Tamil Nadu is working actively to become ‘cashless’. Many of the spinning mills, especially members of Indian Texpreneurs Federation (ITF) have opened bank accounts of their workers, and are carrying out awareness programmes to enlighten the workers about cashless operations, like Unified Payment Interface (UPI). In Tamil Nadu’s spinning industry, almost 60 per cent of workers already have their bank accounts and many mills have ATMs inside their premises. The mills are satisfied with such efforts and workers are also happy. ITF believes that in the next two months Tamil Nadu’s spinning industry will become a ‘substantially’ cashless industry.
Despite all these, industry needs some relief from the Government as conditions are not in the favour of industry. The spinning sector was already witnessing very low demand post Diwali, which has further been deteriorated by the demonetization move. Some retailers have already announced ‘reduction in purchase’ policy till March 2017.
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“For us, the biggest concern is falling demand and we can’t predict much about it too. We are keeping a watch on it. Moreover, earlier we were having 30 days of credit period for our customers but now they are asking for 90 days, so we are being forced to face lack of working capital. Working capital limit enhancement, reduction in bank’s loan interest rates, MEIS to cotton yarn exporters are the three steps through which the Government can support our industry. We have written a letter to Ministry of Textiles (MoT), Government of India requesting about this,” told Prabhu Damodharan, Secretary of ITF. He further added that this may take at least three to six months, in the meanwhile cotton session is also on so the industry is in a dire need to invest in inventories of raw material and finished goods. The Government should grant us one-time working capital financial support for a period of six to nine months, said Prabhu. Similarly, a short-term action plan to reduce the interest rates for spinning industry will be of immense help. As of late banks have started linking the loans pricing to external rating obtained by spinning mills; some mills are being sanctioned credits at exorbitantly high interest rates.
