Ease of doing business for MSMEs: Tamil Nadu Chief Minister MK Stalin on Wednesday wrote to Prime Minister Narendra Modi, drawing his attention to the 'sharp' rise in cotton prices and also to roll back import duty to provide relief to them. the requested. According to a PTI report, MSME. Stalin said high cotton prices, increase in operational costs including bank interest rates and poor demand have affected the sector.
"The spinning sector with 1,500 mills and around 15,000 employees was one of the important engines of Tamil Nadu's industrial economy," Stalin said.
According to the Chief Minister of Tamil Nadu, the spinning sector played a significant role in Tamil Nadu's industrial economy, with 1,500 mills and a workforce of approximately 1.5 million employees.
He said the sector is in "such grave trouble that the spinning mill association has announced to stop production from July 15, 2023." The minister said repayment of loans provided under the Emergency Credit Line Guarantee Scheme (ECLGS) to MSMEs has begun, "which has become an additional burden on the spinning mills and increased the cost of production."
Another factor that set India apart from international competitors was the 11 per cent import duty on cotton, reported PTI.
Stalin also recalled the earlier request for increasing the cash credit limit of spinning mills from the existing 3 months to 8 months for buying cotton as well as reducing the margin money demanded by banks from 25 per cent to 10 per cent. percentage of the purchase price.
“I request the Central Government to provide financial assistance under ECLGS to MSMEs in textile sector by extending the moratorium by one more year. Existing loans can be restructured under ECLGS, converting them into six-year term loans, and new loans can be provided under ECLGS, reducing the regular banking interest rate,” he PM Modi. said, as reported by PTI.
Stalin appealed to the government to consider temporarily banning the export of waste cotton to meet the supply crunch faced by open-end spinners who fall under the category of micro enterprises.
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