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Thursday, February 2, 2023

Stalin urges PM to announce Special ECLGS scheme for MSMEs in garment sector

Date:

Highlighting the severe crisis faced by the garment

export sector due to multiple factors, Tamil Nadu Chief Minister M.K.Stalin

has urged Prime Minister Narendra Modi to announce a Special Emergency

Credit Line Guarantee Scheme (ECLGS) for the MSMEs in the garment

sector immediately and provide 20% additional collateral-free credit under

the new scheme.

In a Demi-Official letter to the Prime Minister, copies of which were

released to the media here today, he said 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”, he said.

Pointing out that Tiruppur wass one of India’s largest knitwear exporting

clusters that cater to US, UK and European markets, the Chief Minister

said MSMEs constitute 95% 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, he said.

“Lakhs of jobs, particularly for rural women who form a significant

chunk of the workforce are in danger”, Stalin said, adding, considering

the above circumstances, the MSMEs must be given special credit

facilities to survive this crisis.

“I request you to announce a special Emergency Credit Line Guarantee

Scheme (ECLGS) for the MSMEs in the garment sector immediately.

Twenty per cent (20%) additional collateral-free credit may be provided

under the new scheme”, Stalin said and urged the Prime Minister to

favourably consider this reuqest.

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