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Monday, February 26, 2024

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


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Chennai: 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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