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The Textile Ministry will approach the Reserve Bank of India and the Finance Ministry to accord priority sector status to the textile industry.
Once the demand is met, the industry will be able to avail itself of bank loans at seven per cent compared to 12-14 per cent it pays currently.
Interacting with the media, K.S. Rao, Union Textile Minister, said considering the fact that the industry is the second largest employment generator after agriculture, it needs a special treatment and giving it a priority sector tag will be more appropriate.
“We will soon approach the Finance Ministry and RBI officials in this regard,” he said.
The textile industry employs about 80 million people from the below poverty level and registers production of $85 billion accounting for four per cent of the gross domestic product.
It also helped the Government contain the current account deficit by registering $31 billion (Rs 1.86 lakh crore) exports last fiscal.
The Government has set an export target of $50 billion (about Rs 3 lakh crore) in next two financial years against $31 billion (about Rs 2.04 lakh crore) achieved last fiscal, said Rao, who took over as Textile Minister on June 19.
He held a closed door meeting with the trade body representing farmers, ginners, spinners, exporters and textile companies here on Tuesday.
“We have heard the grievances of the stakeholders and instructed them to write to us with a possible solution. Delay in decision making at the policy level is hampering growth. I will ensure that this red tapism is removed,” he said.
The Minister was apprised of shortage of skilled labour and erratic power supply. Rao urged the industry to tap the opportunity in Rs 7 lakh-crore global technical textile sector and capture at least Rs 1.50 lakh crore of exports by 2020, he said.
The Textile Ministry plans to approach the Finance Ministry to notify the Rs 3,500-crore Technology Upgradation Fund announced in the Budget.
In order to protect farmers from cotton price fluctuation, the Government proposes to set up a price stabilisation fund with contribution from exporters. This fund will be used to protect farmers and mills at times of distress, said Rao.
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