Uncertainty stares on more than six lakh workers employed in the cotton knitwear industrial clusters in Tirupur district in Tamil Nadu. Tirupur accounts for 90 per cent of cotton knitwear exports from India, employs more than 6,00,000 workers and earns more than Rs 200 billion by way of exports every year.
These are all going to be history as the industrial units are on the verge of closure following the refusal of Banks to grant moratorium of nine months on the term loans and working capital loans availed by the industrial units.
“The units remain closed since March 24 as part of the national lockdown and there has been no business. It will take another nine months for the revival of business. Till then the Government should ‘hand hold’ the industrial units, declare a moratorium of nine months on equated monthly instalments (EMI) as well as on the principal amount. We will pay back the entire amount with interest but what we are asking is some kind of breathing peace,” Raja M Shanmugham , president, Tirupur Exporters Association, told The Pioneer.
The TEA chief has written yet another letter to Prime Minister Narendra Modi highlighting the precarious situation faced by the industrialists in Tirupur. “The Reserve Bank of India had issued a directive permitting a moratorium of three months on payment of instalments in respect of all outstanding term loans as on March 1, 2020.
The Banks were allowed a deferment of three months on payment of interests in respect of all such facilities outstanding as on March 1, 2020. Our concern is that the moratorium of three months period will get expired by 31 May 2020 and the commencement of repayment starts by June 1, 2020 including the compound interest calculated for the moratorium period,” said Shanmugham.
He pointed out that the industries have not been permitted to operate for the last two months. :If we take into account the global market closure date it would be actually three months. The leading global retail stores would reopen only from June and they would place the orders gradually, that too in an increment manner,” he has written in a letter to Prime Minister on Monday.
Pointing out the sensitive nature of the current situation the TEA has asked the Government of India and The RBI for a moratorium on servicing of interest and principal by another nine months for the knitwear industry and MSMEs.
S Sakthivel, executive secretary, TEA, said the Banks should take the industry into confidence and stop considering the latter as enemies.
In an earlier SOS message sent by TEA to Prime Minister, Shanmugham had alleged that the Indian bureaucracy works based on a Rule Bound approach imbibed from the British legacy in all spheres of governance including administrative, legislature and judiciary.
“The Britishers implanted this Rule Bound approach so that nobody could easily comprehend the rules of governance which also gives the rulers to interpret the rules in their favour,” he had said in the earlier message to the PM.
C D Meyyappan, former president of Youth Congress and a senior AICC leader from Tamil Nadu said the industrialists should be given ‘breathing space’ to tide over the present crisis which is an unprecedented disaster.
“The entrepreneurs are not asking for the Moon. They have assured the authorities that they would pay back the loans and the interest. What they need is a few months of time and the Banks which are infamous for their indifference should show compassion and sense of responsibility at this juncture,” said Meyyappan.