The Apparel export industry, facing impending factory closures, has requested Hon’ble Commerce and Industry Minister Shri Piyush Goyal for an immediate stimulus package including protection from being tagged as NPA and raising the moratorium period on term loan EMIs to one year.
“Non-declaration of companies’ accounts as NPAs may be extended for a minimum of one year as the lack of business coupled with fixed costs will make accounts as NPAs,” Apparel Export Promotion Council Chairman Dr A Sakthivel said in his letter to Shri Goyal while talking about order cancellations and delay in payments.
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Further, the Council has asked for extension of the Foreign Trade Policy 2015-20 for a further period of six months considering the crisis due to Coronavirus pandemic, and a reintroduction of the MEIS scheme for apparel exporters with effect from 7 March 2019 and which should continue beyond 31 March 2020.
The reimbursement of Rebate of State and Central Taxes and Levies (RoSCTL) may be given as ‘Direct Cash Transfer’, as in the case of erstwhile ROSL and drawback, he said. He also asked for extending the validity of all import instruments like EPCG and Export Obligations Periods (EOP) by a further 12 months without penalty.
He said that the interest and instalment default period for NPAs should be six months instead of 3 months without downgrading. “Term loan EMIs should be postponed by one year and RBI may extend the bill realization period by six months in view of the liquidity challenges,” the AEPC letter said.
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Among the other prominent fiscal and monetary relief measures, Dr Sakthivel also highlighted the need for extending the packing credit period for existing loans by six months. Interest Equalization Scheme should be enhanced from 3% to 5% for all apparel exporters and extended for a period of 2 years up to 31 March 2022, he said.
“Restructuring of loans and existing limits must not be treated as downgrading of account and there should be no penalty on cancellations. This will help businesses to evolve and find ways to float,” he said.
On easing out labour compliance, Dr Sakthivel appealed the government to contribute wages and salaries of the workers for the lockdown period and requested approval to allow industry to defer payment of PF, ESI and electricity charges by three months.
“We are grateful for all the support extended to minimize the adverse impact of the current situation to apparel exports and we are hopeful that these measures will, to a certain extent, help the industry to overcome the present liquidity crisis,” he said, thanking the Minister for discussing the concerns of EPCs over the video conference on Friday.