Troubles for the textile industry, which has been grappling with financial blood-letting both in international and home markets, are likely to deepen further. While there are fears of half-a-million more job losses, exports from the sector are likely to take a hit of about Rs 15,000 crore (Rs 150 billion), according to industry estimates.
The Interim Budget, which had almost nothing for the sector, left the industry disappointed.
Industry sources said the impact of the slowdown could be far-reaching in terms of jobs and exports. "With no major announcement, we expect around half-a-million job losses, both direct and indirect. The government should have announced some quick-fix measures since the rehabilitation cost later will be much higher," said SP Oswal, chairman and managing director of Vardhman Textiles Ltd.
The job losses are likely to be triggered by a decline in exports by 20 per cent. "Unlike countries like China, which has increased tax rebates on exports from 9 per cent to 15 per cent, India hasn't done much. Our exports are expected to fall by 20 per cent, that is, by around Rs 15,000 crore. This may result in serious job losses," said Oswal.
Echoing his views, Ved Prakash Chiripal, chairman of Ahmedabad-based Chiripal Group of Industries said, "The Interim Budget has been disappointing for the sector."
Talking about the interest rate subvention on packing credit, Chiripal said the industry was expecting an additional 2 per cent interest rate subsidy.
The sector had demanded the restoration of the balance 2 per cent interest rate subsidy.
The Confederation of Indian Textile Industry (CITI) has sought a two-year moratorium on repayment of principal amounts against term loans. "The government should have given the industry relief as it is second highest employer after agriculture," said Shishir Jaipuria, vice-chairman, CITI, and managing director of Ginni Textiles.
The industry had also sought an exemption from service tax as well as import duties on man-made fibres.
