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Garment industry welcomes PM’s package for the MSME sector

The garment industry has welcomed the package announced by the Centre for the MSME sector as growth oriented and visionary. Rahul Mehta, President, Clothing Manufacturers' Association of India (CMAI), the apex chamber of the garment industry pointed out that over 75 per cent of the garment industry was in this sector and the 12 announcements covered in the package would therefore benefit most units in this industry.

Identifying scarcity of working capital as a major constraint for the industry, Mehta said the 2 per cent interest subvention for new loans, 2 per cent additional subvention for export credits and clearance of loans within 59 minutes would immensely help the garment industry to address working capital problems. Credit based on upcoming receivables under e-discounting system is another welcome step in this direction.

Garment industry being the most labor intensive segment of the manufacturing sector, complying with the requirements under various labor laws is a major responsibility for the industry. The present government had initiated some labor reforms for the segment earlier under a special package. Stricter regulation of visits by inspectors and stipulating that returns under 8 labor laws and 10 union regulations have to be filed now only on annual basis have taken this process further. Mehta also welcomed the social security measures contemplated for workers in the MSME sector.