The decision to provide debt relief to the textiles sector was taken during a meeting of Textiles and Commerce and Industry Minister Anand Sharma with Finance Minister Pranab Mukherjee here.
After the meeting Sharma said in a statement that the debt restructuring package would be considered on a case-to-case basis by individual banks.
The finance ministry would examine in consultation with the Reserve Bank of India for a two-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, said a statement issued by the textiles ministry.
“Government directions to banks to consider this on priority would be issued in this regard,” the statement said.
The total outstanding debt of the sector is Rs.155,809 crore, of which a debt of Rs.35,000 crore needs restructuring.
Welcoming the move, chairman of Apparel Export Promotion Council (AEPC) A. Sakthivel said the loan restructuring would help revive the textiles industry.
“The entire garment exporting community of India wishes to give you a big thank for providing much needed relief of Rs.35,000 crore by way of restructured package given to the textile and clothing industry,” Sakthivel said in a letter addressed to the textiles minister.
“This was much needed and will help the industry to continue giving employment to over 11 million workers and also to meet export target of $17 billion set for the year 2012-13,” Sakthivel said.