Meanwhile, exporters seek state levy refund

Barely a day after Finance Minister P Chidambaram asked the exporters to adjust with the appreciating rupee and learn...

Barely a day after Finance Minister P Chidambaram asked the exporters to adjust with the appreciating rupee and learn to live with low profits, textile industry, which has been the worst hit by the 13 per cent exchange rate fluctuation this year, retaliated asking for a level-playing field and equitable taxation.

The industry which is witnessing a grave recession, with exports losing momentum and job cuts in the offing, has demanded refund in state levies and high power costs be taken care of, if they are to live with the steeply appreciating currency. Already big export houses like Orientcraft, House of Pearl, Pearl Fashions and Gokuldas Exports have retrenched workers while putting a stop at new recruitment.

“The finance minister on Monday said that we have enjoyed a protected dollar for a long time. Yes, we have had the privilege but even then we had to bear costs like state levies and power which make us uncompetitive. Now that the protection of dollar is no longer there, we have to seek a remedy for the taxes,” said former chairman, Southern India Mills’ association Manikam Ramaswami.

Refund of state levies has emerged as one of the major demand of the exporters. Industry wants that all state levies which amount to around 6 per cent of the value of exports (around $1.08 billion) should be compensated from the corpus of special additional duty (SAD). The central exchequer collected around Rs 12,700 crore by way of SAD last year.

“In the post-quota scenario, the apparel sector grew by 31 per cent and in the next fiscal the growth was just 3.19 per cent. There is a fear that this year the growth would be in the negative and the Government has to do something very quickly,” said Apparel Export Promotion Council chairman Vijay Agarwal. “There was a potential in the sector to create new jobs, but now we may end up losing jobs.”

Exports in the garment sector alone are expected to report a 18-22 per cent decline this year down from Rs 40,280.11 crore to Rs 31,400 crore (at prevailing exchange rates). This decline would result in job losses to the tune of 6.2 lakh during by the end of the current fiscal.

Textiles hit hard

•The Indian currency has appreciated by over 13% this year.

•Textile exports this year may not even achieve last year’s target of $18 bn

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•Without government intervention, sector stands to lose atleast 4 lakh jobs in 2007-08