Funds crunch hits textile industry

The textile industry has alleged that its business is taking a hit because the Centre has faltered in clearing payments of around ~16 billion meant for the ready-made garments segment alone , under the Remission of State Levies (ROSL) scheme.

In a letter, Tiruppur Exporters Association has urged the government to clear its dues as their working capital is drying up and if the situation continues, hundreds of units will close down.

The government had allotted ~ 4 billion in 2016-17, said sources in the industry. The original allotment under the ROSL scheme was ~15.55 billion for 2017- 18 and was later revised to ~18.55 billion in the Budget this year. The budgetary allocation for the financial year 2018-19 is ~21.64 billion, the sources added.

Textile industry insiders said the Centre's allocation was too little. The industry has expressed concern about the fact that payments have been cleared for exports till May 2017 and some export units have not received payment till March 2017.

The backlog for the readymade garments segment between September 2016 and March 31, 2018, would be around ~13.68 billion. Again, Tiruppur Knitwear Exports is waiting to get around ~3.30 billion, according to sources.

“The amount pending is huge and the exporting units, which plan their day-to-day operations and other financial commitments based on the ROSL amount, have been affected significantly,” said a representative of the Tiruppur Exporters Association.