Textile Ministry sends proposal to Finance Ministry for loan restructuring

Source: The Economic Times, Feb 27, 2012

NEW DELHI: The Textiles Ministry today said it was in talks with the Finance Ministry to restructure Rs 1 lakh crore loans extended to the textiles sector.

“We are talking again to Finance Ministry (to recast textiles loans). It has suggested us that we need to look into the figures a little deeper,” Textiles Secretary Kiran Dhingra said here.

The industry has been clamouring for relief from the government on the plea that high interest rates have hit-hard the silk, spinning and power-loom units.

The Secretary was talking to reporters on the sidelines of an Apparel Export Promotion Council (AEPC) function.

Finance Minister Pranab Mukherjee is scheduled to present the Union Budget on March 16.

Recently, the Textiles Ministry had consultations with RBI but the central bank had turned down the proposal to recast the loan, mostly from the PSU lenders, stating it would not be “the best international practice”.

On the issue of social compliance code for garments manufacturers, Dhingra said, “I request ‘Disha’ management to take up small units initially and create awareness among them about issues like child labour and wages.”

The AEPC has launched an initiative ‘DISHA’, sponsored by Textiles Ministry, aimed at encouraging apparel units to adopt better social practices and make their items globally competitive.

The programme attempts to educate apparel exporters on a ‘code of ethics’ covering all critical areas of social and environmental concerns like child labour, health and industrial safety.

The move comes in the backdrop of the concerns raised by a few western countries like the US regarding usage of child labour in production of garments by some domestic units.

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