Hit by recession, textile businessmen in Surat have urged union textile minister to review the situation in the aftermath of demonetization and the roll out of Goods and Services Tax (GST) and intervene to turn around the situation.
They claim that the production of fabric has dropped from about four crore metre per day before demonetization to about 2.5 crore metre per day now, the number of working embroidery machines has fallen and the demand for new shops have also dropped.
“Exports of garments have dropped drastically. Fabric traders are not getting payment on time. We want the ministry to review our situation as it will be about one year that GST has been rolled out and about one and a half year of demonetization and take corrective action,”said Champalal Bothara, general secretary of Federation of Surat Textile Traders Association (FOSTTA), which has appraised the minister about the situation arising out of demonetization and GST, terming the latest tax reform as a double whammy. “Just as we were coming out of the effects of demonetization, we were exposed to premature roll out of GST. Traders are facing shortage of working capital. Institutional loans are not available and private lending has also stopped after GST,” said Bothara.
FOSTTA claimed that sales of local textile traders have dropped by about 30-40% and the payment have been delayed. Falling earnings have resulted in traders shifting to low rent shops and demand for new shops has dropped. Those who had availed loans are finding difficult to honour their EMIs. In one of the notes, FOSTTA said that post demonetization, the number of embroidery machines has dropped by 1.25 lakh, 89,000 odd power looms have been sold at the price of scrap, exports are on a continuous decline and women working in embroidery are becoming jobless. “We have brought the business scenario to the notice of the minister. We are clueless as to what the ministry wants to do about the sector. If prompt corrective actions are not taken, the situation can
deteriorate,” said Bothara.