Federation of Indian Chambers of Commerce and Industry (FICCI) has demanded a special bailout package for highly labour-intensive textile sector.

The growth of textile industry is declining following slowdown and global factors and any package would mitigate chances of retrenchment in textile sector. It is recalled that PM asked the industry to refrain from job cuts but industry has now thrown the ball in center's court.

Growth of textile industry dropped to 0.8 per cent in April-August 2008-09 from eight per cent in 2005-06. Investment in textile sector witnessed decline of 66 per cent as compared to same period of last year.

The possibility of large scale lay off can not be ruled out under such circumstances. The industry body also asked the center government to extend moratorium for one year on term loans and increased drawback rates.

FICCI has sought extension of sunset clause for export oriented units (EOUs) for 5 years and reduction of excise duty on man-made fibers. It also advocated imposition of 10 per cent import duty on man-made fibers besides 7 per cent duty free scrip as a refund of state taxes.