Talking to The Financial Express

, Deepak Parikh, chairman of ICMF said that the federation had recently taken up the issue of various financial difficulties of besetting the textile mills with the Indian Bankers' Association (IBA) and also suggested relaxing current ratio, reducing margins, liberalising bill discounting facilities, forming uniform lending norms, extending bank credit for longer periods for cotton purchases, rescheduling loans, lowering interest rates to PLR plus one from the existing 17 per cent. "We expect IBA to respond quickly by advising banks to take up a sympathetic view of mills," says Parikh.

Reacting to the government's release of 5 lakh bales of cotton for export, MP Gajaria, secretary-general, ICMF said that this wouldunnecessarily give prop-up to the cotton prices at home adding to the costs of the mills which are already bending under high cost operations.

"Textiles being items of mass consumption the duty incidence should be minimal, instead it is much higher than even the luxury items" laments Gajaria. Therefore, it is suggested that the effective duty on cotton polyester blended yarn should be brought down from 20.7 per cent to 10 per cent and on other blended yarn from 20.7 per cent to 15 per cent.

The ICMF came down heavily on the dual excise duty being levied on the mill sector and independent processing sector. It has been established that the composite mills would end up paying 3 to 6 times more excise duty on processed fabric which is unfair to the mills. "We need to be given level playing field by making excise structure uniform for both sectors" says Parikh.

The excise evasion is rampant in the decentralised sector and the exchequer is losing to the tune of Rs 3,500 crore. To plug this, the governmentinformally started levying excise duty of Rs 1.5 per chamber of the stenter machine per month for the independent processors which may get formalised. In the event, processors in the decentralised would pay much less excise giving unfair competition to the mill sector, says Gajaria.

The ICMF which is federation of 12 regional mills associations will be holding its 40th AGM on Tuesday.