Kamal Nath (left) with Spanish industry minister Miguel Sebastian in New Delhi on Thursday. Picture by Ramakant Kushwaha

New Delhi, Dec. 11: The government is brewing stimulants for textile firms, mauled by the global financial crisis.

Top officials said the government was working on a package for textile exporters. It may include indirect subsidies and a dedicated credit line. The government has already announced an interest subsidy for exporters.

The officials said the stimulus package announced on Sunday was just the first of many similar moves. Commerce minister Kamal Nath said, “There is step one, then there is step two, and then there is step three.”

Boosters for several other export-oriented industries, including engineering, may be announced later, the officials said.

They said sops in the form of tax reliefs were not possible as the country was facing a sizeable budget deficit. Planning Commission deputy chairman Montek Singh Ahluwalia today said the fiscal deficit “would be worse than what we had projected”.

“Future measures would have to depend more on credit stimulus and not on fiscal measures alone,” officials said. On Sunday, the government had cut excise duties across the board by 4 per cent.

Yesterday, the Prime Minister’s Office had convened a meeting and asked for a package for textile firms, the officials said. The textile industry, which accounts for 17 per cent of exports and employs 88 million, is likely to fall short of its targeted revenue of Rs 1,50,000 crore by a third for the fiscal.

Officials say the lack of orders from the US and European markets has led to huge production cuts.

In India’s textile hub — Tirupur — about 30 per cent of the mills have reduced shifts and working days.