New Delhi: The Union government on Wednesday sanctioned a Rs200 crore interest-free loan to the Tamil Nadu government to bail out distressed textile dyeing firms.
An official statement said the state government will utilize the funds to financially support 18 effluent treatment plants set up by dyeing units in Tirupur which face a crisis. The loans will benefit the textile processing and knitting industry in the area.
Tirupur is a textile processing hub which employs over five lakh people and contributes 22% of the total garments exported from the country. Troubles in the processing industry could hit the entire garment sector in the region.
“The move will help 450 dyeing units recover from the financial crisis and help them to complete the projects to achieve 100% capacity utilization," said the statement.
“Dyeing units in Tirupur had collectively set up 18 CETPs (common effluent treatment plants) at a total cost of Rs1,013 crore. Being the first of its kind, the project had several technical challenges and cost overruns which put them into financial crisis due to outstanding bank loans and incomplete projects," the statement added.
Earlier this month, the Union cabinet had cleared a Rs6,006 crore scheme for the textile sector aimed at creating 11 lakh direct and indirect jobs in the sector over the next three years.