Interviews
'Inexplicable disregard towards T&G sector baffles me' – Mr Mehta, CMAI
14 Apr '09
6 min read
“Cambodia has eliminated all taxes, including income tax, except social security, which has been reduced to 4.5%. It has also reduced night working allowance to workers from 2 times to 1.3 times. China has increased its tax incentive from 9% to 15%. Bangladesh of course has the dual advantage of tax free regime plus duty free import in to the most important and biggest buyers of textiles and clothing; USA and EU”.
“On the other hand”, he thundered, “In spite of our industry being one of the most critical in terms of employment and foreign exchange earnings, our Government has not made any special provisions for the Textile or the Apparel Industry in any of its Special Stimulus Packages announced over time.
“It is this inexplicable disregard to the textile and apparel industry which is baffling me. Why would any Government not pay heed to the problems of an industry which is the highest employer after agriculture, which has the lowest capital to labour ratio and which has the maximum potential for employing the weaker sections such as women and unskilled workers”.
He was very explicit when he said the agenda for the new Government is fairly clear and that it must devise systems to refund the state and local level taxes in addition to the central government taxes; provide loans at internationally competitive interest rates of around 3% to 4%; sign zero duty agreements with major buyer countries from which India will benefit, instead of with smaller countries where the others will benefit”.
Continuing in the same vein he said, “Fiscal and other policies must be stable and long term, not of short durations like 3 months and which does not help the industry per se and it must allow duty free imports of fabrics, raw materials and machinery to help the industry expand both its product base as well as capacities; encourage exports of higher value products, and not discourage them by keeping caps on duty drawback, etc.
“It must amend its labour laws to accommodate longer working hours, women working in night shifts, contract working, etc. All these will ultimately increase employment, not reduce it. The Government must seriously re-look at providing Income Tax exemption; provide incentives for Research and Development, similar to Pakistan's measure of giving 6% R&D incentive and provide a major thrust to the marketing of “Made in India” concept to the world markets”.
Speaking on behalf of the textile and apparel sector as a whole he categorically said, “By my above submission, I do not by any means suggest that the all the industry needs to do is to sit back and bask in the facilities provided by the Government. We have made this mistake once, when we had the protection of the quotas and we had been rudely jolted out of our slumber and let us not get caught napping again.
“Even if we are to get our full wish list implemented, today's world will still call for aggressive marketing, intense competition, and hard fought market shares based on productivity, quality and service. No Government is going to do that for us. We need to do it ourselves. Are we prepared for it”, he asked himself and the textile and apparel industry entrepreneurs.
“On the other hand”, he thundered, “In spite of our industry being one of the most critical in terms of employment and foreign exchange earnings, our Government has not made any special provisions for the Textile or the Apparel Industry in any of its Special Stimulus Packages announced over time.
“It is this inexplicable disregard to the textile and apparel industry which is baffling me. Why would any Government not pay heed to the problems of an industry which is the highest employer after agriculture, which has the lowest capital to labour ratio and which has the maximum potential for employing the weaker sections such as women and unskilled workers”.
He was very explicit when he said the agenda for the new Government is fairly clear and that it must devise systems to refund the state and local level taxes in addition to the central government taxes; provide loans at internationally competitive interest rates of around 3% to 4%; sign zero duty agreements with major buyer countries from which India will benefit, instead of with smaller countries where the others will benefit”.
Continuing in the same vein he said, “Fiscal and other policies must be stable and long term, not of short durations like 3 months and which does not help the industry per se and it must allow duty free imports of fabrics, raw materials and machinery to help the industry expand both its product base as well as capacities; encourage exports of higher value products, and not discourage them by keeping caps on duty drawback, etc.
“It must amend its labour laws to accommodate longer working hours, women working in night shifts, contract working, etc. All these will ultimately increase employment, not reduce it. The Government must seriously re-look at providing Income Tax exemption; provide incentives for Research and Development, similar to Pakistan's measure of giving 6% R&D incentive and provide a major thrust to the marketing of “Made in India” concept to the world markets”.
Speaking on behalf of the textile and apparel sector as a whole he categorically said, “By my above submission, I do not by any means suggest that the all the industry needs to do is to sit back and bask in the facilities provided by the Government. We have made this mistake once, when we had the protection of the quotas and we had been rudely jolted out of our slumber and let us not get caught napping again.
“Even if we are to get our full wish list implemented, today's world will still call for aggressive marketing, intense competition, and hard fought market shares based on productivity, quality and service. No Government is going to do that for us. We need to do it ourselves. Are we prepared for it”, he asked himself and the textile and apparel industry entrepreneurs.
Fibre2fashion News Desk - India
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