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Demonetisation takes heavy toll on MMF sector: SRTEPC

As demonetisation enters a fortnight, there is news that its after-effects seems to have taken a toll of the country's largest man-made fabric (MMF) sector. According to the Synthetic and Rayon Textile Export Promotion Council (SRTEPC), trade has lost steam with weavers, textile processors and traders facing severe liquidity crunch amid falling demand of fabrics and cloth from the key consumer market in the country.

Delegates from SRTEPC and around 17 other export promotion councils across the country (two members each from the councils) attended a meeting convened by the Central government on the impact of demonetisation on the trade and commerce in New Delhi.

The vice-chairman of SRTEPC, in his presentation on the impact of demonetisation on textile sector pointed out that the man-made fabric (MMF) sector is facing dire situation and is on the verge of collapse. Only 30 per cent of the units are operational whereas the rest have shut down due to the impact of demonetisation. SRTEPC's vice-chairman Narain Agarwal, barring spinning units, majority of yarn preparatory, texturizing, sizing, twisting, warping, weaving, processing and embroidery units have been paying wages in cash to the workers. They maintain accounts and it reflects in their balance sheets. After demonetisation, workers’ wages has become a big question. He SRTEPC has demanded unit owners should get cash in new currency. Meanwhile, workers would be encouraged to open bank accounts, he said.

Agarwal said from manufacturers to wholesale to retail and consumer, there was no demand in the market. Liquidity of cash has almost been squeezed. This has led to the closure of 80 per cent textile processing units and weavers are forced to operate eight hours a day and almost 90 per cent embroidery and knitting units closed.

 
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