The Confederation of Indian Textiles Industry (CITI) has welcomed the decisions of the Union Cabinet, chaired by Prime Minister Narendra Modi, which will provide economic support for MSMEs, farmers, street vendors and agricultural sector. Since they are the backbone of the Indian economy, support to them will result in growth of the overall economy.

MSMEs, which have 29 per cent share in the country’s GDP and 48 per cent share in the country’s exports and provide employment to millions of people, will receive maximum benefits from the change in the definition of MSME under which turnover limit for medium enterprises has been revised upward to ₹250 crore from present ₹100 crore, as announced earlier. Under the new definition, the distinction between manufacturing and services enterprises has been eliminated.

In the revised definition, even small weaving mills may be included and because of this many garment manufacturers will benefit, said CITI chairman T Rajkumar. He further stated that the Centre’s revision in the definition of MSMEs will give MSMEs the much-needed confidence to grow and will promote its seamless expansion in the country.

Rajkumar also welcomed the decision of Distressed Asset Fund of ₹4,000 crore created to help weaker MSMEs that are struggling through NPA norms due to the outbreak of COVID-19 pandemic. “This fund will bring them back into the business and they can start the business activities afresh with the help of this fund. Further ₹20,000 crore subordinated debt for stressed MSMEs is likely to benefit 2 lakh stressed MSMEs.”

“This is the first time when the Government has given so much importance to the MSME sector,” said Rajkumar. He further stated that the Government’s announcement of ₹10,000 crore funds for MSME to get listed in the stock market is a welcome measure. He pointed out that along with the other investment, this fund will reach ₹50,000 crore and more funds from the market to MSMEs-listing in the stock market will make MSMEs attract more funds from the market and this will boost the MSME Sector to enhance its reach to major destinations.

CITI chairman appealed to the Government to consider industry’s urgent demand of extending the moratorium for repayment of loans and interest up to March 31, 2021 and extend 25 per cent additional working capital without any collateral or margin money for all the categories of accounts other than MSMEs also.

He has also hoped that the Government would consider textile and clothing industry’s demand for one-time debt-restructuring which can solve many financial related problems of the textile and clothing sector.

CITI chairman also felt that the Government would soon announce a special package for boosting exports for all the textiles and clothing products including cotton yarn and fabric to grab the emerging opportunities and also consuming the surplus cotton that might significantly affect the cotton farmers in the country.

The revised upward limit for the medium enterprises to ₹250 crore, excluding exports from ₹100 crore as announced earlier, will certainly boost many companies which were not able to come under MSME category. However, in order to encourage technology upgradation and scale of operation in the textile sector, the condition of ‘investment and sales turnover’ needs to be modified as ‘investment or sales turn over’, Rajkumar said. He hoped that the capital-intensive textile sectors like spinning, independent weaving, processing, etc will also get the much-needed economic package to tide over the ill-effects of COVID-19 pandemic situation.