Textile and handloom units in Orissa have reported nearly 30 per cent slump in sales over three months.
Gauri Sankar Dash, secretary general, Orissa Assembly of Small and Medium Enterprises (OASME), said: “The sagging demand for textiles and handloom products in the domestic as well as the export market, due to the downturn, has dented sales. Textiles and handloom units have witnessed about 30 per cent drop in sales over the past three months.”
OASME has sought a bailout package from the Orissa government for the revival of the beleaguered textile sector in the state, Dash added. The package includes formal credit support to textile units in the form of interest subsidy on borrowings from commercial banks and also the creation of an exclusive technology upgradation fund for the sector.
Hemant Sharma, director, industries department, said: “Keeping in view the demands of the textile units, the state industries department has made the proposal for a technology upgradation fund and also for providing interest subsidy on loans to the units. The proposal is under an advanced stage of consideration by the state government.”
Sharma pointed out that earlier, the textile and handloom units were getting long-term credit support from the buyers as these units were operating on high margins. However, over the past few months, the economic meltdown has squeezed the margins of these units. As a result, buyers were reluctant to provide the much-needed credit support for these units. This was forcing them to bank on formal credit support from commercial banks.
States like Gujarat and Tamil Nadu which have a high concentration of textile units are providing an interest subsidy of 2-3 per cent to the units on loans availed from commercial banks, Sharma added.
He felt that a technology upgradation fund was needed for the textiles sector as most of the power looms units in the state were finding it tough to make progress with obsolete equipment. There are an estimated 1,500 textile and handloom units in Orissa. Of these, around 50 per cent are sick.