Lower demand due to the global financial crisis, rise in interest rates, revised power tariff, repayment of the Emergency Credit Line Guarantee Scheme (ECLGS) loans and unrestricted imports of yarn and fabrics from China, Bangladesh and Vietnam are leading to huge cash losses of Rs 20-25 per kilo gram of yarn, say spinning industry players.
According to Tamilnadu Spinning Mills Association (TASMA), over the past several months, bank interest rates have gradually risen from 7.75 per cent to 10.75 per cent, increasing the cost of yarn production by Rs 5 to Rs 6 per kg. The recent hike in Tamil Nadu electricity tariffs, current consumption charges, maximum demand charges, peak-hour charges and other indirect charges have added to the woes of the units, which are now seeking relief from the Central Government.
The industry body said that due to the sustained demand recession during the past three years, first due to the Covid pandemic and now due to th
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