Would want better access to credit, prune the caution list of exporters: CEPC’s Mahavir Pratap Sharma

The Carpet Export Promotion Council (CEPC), set up in 1982, has been involved in promoting the exports of handmade carpets, rugs and floor coverings. As per CEPC, India has a world market share of 35% in the handmade carpets and rugs category and is seeing a steady growth rate. Mahavir Pratap Sharma, Chairman, Carpet Export Promotion Council (CEPC) spoke to ET on how, in the interim budget, the handmade carpet segment should be given adequate incentives to bring them on par with competitors globally. Excerpts:

Economic Times (ET): What are your expectations from the interim budget 2019 for the MSME sector?
Mahavir Pratap Sharma (MPS): Atleast 25% of the gross loans by any bank should be given to the MSME mandatorily at a rate of interest which is lower and at the most 50% valuation of collateral as they have stock hypothecation and lien on receivables also. Secondly, single window online application and approval of all central and state registrations within a time bound period should be done otherwise it should be deemed to be approved. Thirdly, a reduction of GST forms and returns is the need of the hour.

ET: Do you feel that the budget is expected to fulfill the key demands voiced by MSMEs?
MPS: Since it is an interim budget, we assume that it will also be the financial manifesto of the current government and will show their intent. They should lay the roadmap for a stronger economy which will always depend on MSME in the textile sector as we are the second largest job provider in the country after agriculture.

ET: What steps in your view can uplift the MSME and bring it on par with other sectors of the economy?
MPS: In addition to the above, if the government can give them a lower threshold of requirements for government tenders in comparison to established and large corporates, industrial land at lower rates in comparison to large enterprises and create sectoral industrial areas with MSMEs’ supplying to existing large enterprises, such steps would definitely benefit their cause.
ET: What is your wishlist for CEPC in the upcoming budget?
MPS: Bank loans are not coming our way as our production cycle is very long and the requirement of funds is higher in comparison to apparel which has a shorter cycle. Secondly, the margin money for loans in exports and imports should be reduced. The RBI has been playing a very negative role and has created a caution list of exporters (which includes most of carpet exporters) for Guaranteed Remittance (GR) forms not cleared towards outstanding payments whereas this is less than 5% of the total exports of the said exporter.

There should be a waiver and extension of the deadline which expired on December 31. GST on job work should be permanently removed as we have 25 different job works and the paperwork and compliance required for the same will be very cumbersome and not yield much revenue for the government. Finally, the bilateral trade agreements always overlook import duty in non- carpet manufacturing countries and focuses more on other products. The job creating sector of handmade carpets should be looked upon by MEA on priority at behest of the finance ministry.

ET: What are some of the other incentives that you would like to come by for carpet exporters?
MPS: State levies like taxes on petrol, diesel, electricity, stamp duty, mandi tax, etc should be refunded back to exporters by way of Rebate on State Levies (ROSL) to handmade carpets as this is making us uncompetitive in comparison to other countries. Also, the huge budget of marketing and branding should be provided by the finance ministry to textiles for promoting handmade carpets to the end users as this sector is facing international competition from machine made carpets and not handmade carpets. We are the number one carpet producing country in the world at 35% world market share and are on a robust growth path.