Tamil Nadu Chief Minister M K Stalin has requested Prime Minister Narendra Modi to announce a special Emergency Credit Line Guarantee Scheme (ECLGS) for the micro, small and medium enterprises (MSMEs) in the garment sector.
“You would be aware that the garment export sector is undergoing a severe crisis, as a result of multiple factors including the economic impact of Covid-19, the Russia-Ukraine War, and the anticipated economic slowdown in the West. I understand that the month-on-month growth rate in readymade garment exports is now showing a sharp decline,” Stalin said in his letter to the Prime Minister.
Financial crisis
Tiruppur is one of India’s largest knitwear exporting clusters that cater to US, UK, and European markets. MSMEs constitute 95 per cent of the exporting units in this cluster. “It is reported that the orders for the summer season have now declined by around 40% when compared to last year. The exporting units and their supplier MSMEs are staring at a severe financial crisis in the ensuing months due to low demand. Lakhs of jobs, particularly for rural women who form a significant chunk of the workforce are in danger,” Stalin stated.
Considering the current circumstances, the MSMEs must be given special credit facilities to survive this crisis.
He requested the PM to announce a special ECLGS for the MSMEs in the garment sector immediately. 20 per cent additional collateral-free credit may be provided under the new scheme, he added.