To revive MSMEs and get them back to normal functioning, a fresh infusion of liquidity is urgently required.
Apparel exporters in Tirupur have requested the Finance Minister to announce a new scheme like ECLGS, so that MSMEs are permitted to avail additional credit facility of 10 per cent to 20 per cent of the existing limit, which is need of the hour to bail them out of the crisis.
Raja M. Shanmugham, President and E. Palanisamy, Vice President, Tirupur Exporters’ Association (TEA) met Nirmala Sitharaman, Union Minister of Finance and Minister of Corporate Affairs in Chennai and handed over a representation requesting to address the issues to support MSMEs at this hour of crisis and also for removal of condition imposed in the Union Budget 2022-2023 while importing accessories.
They also highlighted that the exporting units, which were purchasing 1kg cotton yarn, at Rs. 300, 15 months back, could now purchase only half kg cotton yarn for the same amount and as a result of this, the MSMEs are now undergoing severe liquidity crisis.
It is worth mentioning here that Tirupur Knitwear exports have clocked Rs. 26,030 crore in the 10-month period (from April-January) in the current financial year 2021-22 and are poised to cross Rs. 32,000 crore.
The industry is apprehensive that the recent invasion of Ukraine by Russia and the subsequent consequences globally may disturb exports into EU and UK Markets.
Raja M. Shanmugham also highlighted that in the Union Budget, a Condition No. 9 has been now imposed in the amended Notification No. 02/2022-Customs, and due to this condition, the knitwear exporting units have to visit Customs Preventive Unit located in Coimbatore for import of items on each occasion– facing more practical difficulties in addition to losing lot of time due to various reasons.
Besides, the undue delay, there’s incurring of additional expenses as well to get things done. TEA has pointed out that this problem has emerged at a time when the Government is advocating for ease of doing business.
TEA has also reiterated the requisition for extension of the Interest Equalisation Scheme (IES) for another two years with retrospective effect. The IES on Pre and Post Shipment Rupee Export Credit, which expired on 30 September 2021, has not been extended.
