Wednesday 30 May 2012

Government agrees that there is a need to support Textiles Industry at this time of crisis

The Union Minister of Commerce, Industry and Textiles Shri Anand Sharma met the Finance Minister Shri Pranab Mukherjee, here today to urge a loan restructuring for debt stressed textiles industry. Textiles Industry Associations had represented to Shri Sharma of high stress levels and industry sickness and sought his intervention for a restructuring package. Industry associations sought a 2 year moratorium on long term loans, special dispensation to be provided by Reserve Bank of India in its NPA rules working capital term loans. Textiles Minister had extensive stakeholder consultations with the industry, bankers and Ministry of Finance to alleviate industry issues. 

Following his meeting with Finance Minister, Minister Shri Anand Sharma announced that Government agreed that there is a need to support the Textiles industry in this time of crisis. Textiles Minister said that the total outstanding debt of textiles sector is Rs. 155,809 crores of which debt of Rs. 35000 crores needs restructuring. Government directions to banks to consider this on priority would be issued in this regard. 

Textiles Minister Anand Sharma said that there was agreement with the Ministry of Finance that the debt restructuring package would be considered on a case to case basis by Individual Banks. Ministry of Finance would examine in consultation with Reserve Bank of India for a 2 year moratorium on term loans, special provision in NPA norms to avoid asset reclassification and working capital eroded to be converted into working capital term loans repayable over a period of 3-5 years. 

An inter-ministerial committee of senior officials would be constituted to coordinate with Industry-Banks in expeditious restructuring. 

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