The government has announced a new relief package to revive the ailing textile unit. Under this new scheme banks and financial institutions will be allowed to lend at 8-9 per cent per annum on their existing term loan exposure amounting to Rs 6,000 crore.

In New Delhi, the textile Secretary, Mr S.B. Mohapatra, and Banking Secretary, Mr N.S. Sisodia, announced the features of the scheme.
 
Sisodia said, Banks and financial institutions will be allowed to raise cheaper funds through External Commercial Borrowings (ECBs) for five years to enable them to provide loans at less than Prime Lending Rates and waive penal interest rates to ailing but viable textile units.
Textile Secretary S B Mohapatra, said total exposure of banks and financial institutions to textile sector was Rs 10,000 crore.

According to the Secretary (Textiles), about 350 integrated units may become eligible for availing of the benefits of the scheme. The Finance Ministry would monitor the implementation of the scheme.

To induct technology in the decentralised powerloom sector, the TUF scheme has been enlarged for units wanting to take loans up to Rs 50 lakh.

Mr Mohapatra said that the direct subsidy under the scheme for such units would be increased from 12 per cent to 20 per cent. The sources of credit has also been increased by inclusion of genuine NBFCs. The Government has in all committed Rs 260 crore to the decentralised powerloom industry. A new group insurance scheme for the powerloom sector has also
been started.