FUNDING for the textile sector may get easier soon. The government is planning to include the textile and apparel industry in the list of items eligible for priority sector lending. The ministry of textile is preparing a note in this regard which would soon be sent to RBI for its approval. “The move is aimed towards getting easy fund availability for the industry which requires huge funds for technology enhancement and capacity addition,” an official in the textile ministry said adding that it would help the industry tackle the global competition.
The proposal initially mooted by a working group on promotion of textile industry had got a backing of the Prime Minister’s office (PMO) also, the official said. Prime Minister Manmohan Singh, in his recent speech at the textile summit in the city, has asked the sector to increase the export of quality products and had promised that the government would extend all possible helps required for this.
Banks give 40% of their total credit for priority sector lending, in sectors such as agriculture, small and medium enterprises (SME) and exports. It is expected that the inclusion of textile and apparel sector under priority sector lending will unlock over Rs 1 lakh crore for the sector.
“The proposal is expected to be finalised soon after which it would be sent to the Reserve Bank of India for approval,” the official said. Once RBI clears the proposal, banks would be free to include textile and apparel sector funding as part of their exposure to meet priority sector lending target.
The ministry has also finalised a proposal to set up Territorial Textile Investment and Production Complexes (TTIPC) in the country on the lines of the existing special economic zones (SEZs). Units situated in the proposed TTIPC would be eligible for fiscal concessions and relaxed labour laws.