Home / Knowledge / News / Textiles / Indian textile industry hails budget with some scepticism
Indian textile industry hails budget with some scepticism
01
Feb '18
Textile associations in India have welcomed the raised allocation for the sector in this year’s budget, saying it will help firms in many ways, including clearing pending rebate of state levies (RoSL) dues. The drop in corporate tax rate for units with an annual turnover of up to Rs 250 crore will benefit most textile units, they feel, with some scepticism.

The associations, which include the Southern India Mills’ Association (SIMA), Coimbatore-based Indian Texpreneurs Federation (ITF), the Confederation of Indian Textile Industry (CITI), the Tiruppur Exporters Association (TEA), the Cotton Textiles Export Promotion Council (TEXPROCIL) and the Clothing Manufacturers Association of India (CMAI), also welcomed the increased allocation for infrastructure development and the focus on agriculture, and saw a lot of incentives for micro, small and medium enterprises (MSMEs).

The National Livelihood Scheme of Rs 5,750 crore will benefit the textile sector in rural areas, according to CITI chairman Sanjay Jain.

The budgetary allocation for the textile sector has been increased to Rs 7,148 crore, which includes Rs 2,300 crore for the Amended Technology Upgradation Fund Scheme (ATUFS) of the textiles ministry, over Rs 6,251 crore last year.

ATUFS was introduced in 2015 specifically targeting employment generation and export, promotion of technical textiles, technologically upgrading existing looms and encouraging quality in the processing industry.

Jain feels a large part of the increase in allocation has gone to the state-owned Cotton Corporation of India (CCI) for performing minimum support price (MSP) operations and hence, won’t help the industry.

Not much has been said in the budget about concrete correctional measures to boost India’s export competitiveness in textiles or policies favouring a revival of textile special economic zones, said Bhavin Parikh, CEO of Ahmedabad-based Globe Textiles (India) Ltd.

Welcoming the scheme in the budget for MSMEs to address issues relating to non-performing asset (NPA) norms and stressed assets, a long pending demand of the industry, SIMA chairman P Nataraj said the reduction of corporate tax rate from 30 per cent to 25 per cent for units with an annual turnover of up to Rs 250 crore will benefit more than 80 per cent of the textile units and help them plough back the amount for creating more jobs and value addition.

Nataraj and TEA president Raja M Shanmugham, however, feel the allocation of Rs 2,164 crore for RoSL compared Rs 1,855 crore last year for the export of garments and made-ups is still inadequate as there is a huge backlog for 2017.

The RoSL scheme for apparel exporters came into effect from September 20, 2016, and the actual requirement for the apparel sector alone till March 31 this year is in the range of Rs 5,000 crore, said Shanmugham. TEXPROCIL chairman Ujwal Lahoti hoped the increased funds will cover fabrics as well under the RoSL scheme.

The 20 per cent higher allocation for infrastructure development shows the government’s thrust on renewing spurt in economic activity, according to GHCL Ltd managing director RS Jalan. CMAI president Rahul Mehta said infrastructural bottlenecks have been hindering apparel manufacturing, which involves significant domestic transportation of raw materials and finished goods.

Referring to the reduction of women employees' contribution towards the Employees Provident Fund (EPF) to 8 per cent for the first three years, many industry associations said apparel sector workers will be among the primary beneficiaries of this provision as the sector extensively employs women.

Although the rise in basic customs duty (BCD) on silk fabric to 20 per cent from 10 per cent would save the industry from dumping from China, the industry aspired for an increase in BCD across both yarn and fabric and therefore, is disappointed with this partial measure, CITI chairman Jain said.

The step to make the MSP of all crops 1.5 times that of the production cost will benefit cotton farmers, but will result in high inflation for consumers and the downstream segments and make the industry uncompetitive internationally, Jain added.

CITI urged the government to change from MSP to the direct subsidy system, so that the profit protection measure of farmers doesn’t impact the textile consumer and the value added industry.

Though it was expected of the budget to revive the retail sector, which is at an all-time low, there is no chance of its revival in the near future, Anurag Singhla, vice president of South India Garment Association (SIGA) said. (DS)

Fibre2Fashion News Desk – India


Must ReadView All

Courtesy: Pyrates Smart Fabrics

Textiles | On 16th Jul 2018

Spain's Pyrates Smart Fabrics targets Asia, S America

Spain-based Pyrates Smart Fabrics, whose major markets are northern...

Bangladesh to modernise 3 jute factories to boost sector

Textiles | On 16th Jul 2018

Bangladesh to modernise 3 jute factories to boost sector

The executive committee of Bangladesh’s National Economic Council...

Courtesy: Asda

Apparel/Garments | On 16th Jul 2018

J Sainsbury agrees to £3.5 bn financing for Asda merger

J Sainsbury plc has agreed for a financing package of £3.5 billion in ...

Interviews View All

Amit Jain
Shingora Textiles Ltd

‘In terms of fabric, the fastest growing category for us is a blend of...

Headhonchos
Indian textile value chain

Adopt innovative techniques, go for automisation rather than being...

Dinaz Madhukar
DLF Emporio and DLF Promenade

‘Each event and promotion is planned out keeping in mind the business of...

Ravindra Jain, Ashish Baid

Oswal Prints Private Limited has been manufacturing and exporting ethnic...

Abhishek Pachauri

Reckon Industries is into manufacturing of textile process house machines, ...

Hardik Sanghvi

Idealin Fogging Systems has been engaged in designing and manufacturing...

Marten Alkhagen
Swerea IVF AB

Marten Alkhagen, Senior Scientist - Nonwoven and Technical Textiles of...

Suresh Patel
Sidwin Fabric

Sidwin Fabric is a manufacturer and exporter of polypropylene textiles and ...

Mohammad Hassan
Biax Fiberfilm

About one in every 20 patients picks up an infection while hospitalised....

Pranav Mishra
Huemn

Designers Pranav Mishra and Shyma Shetty’s Huemn is known for its...

Sidharth Sinha
Sidharth Sinha

<b>Sidharth Sinha</b> has contributed to the successful rebirth and...

Sonam & Paras Modi
SVA

Sonam and Paras Modi's Sva Couture is synonymous with head-turning...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


July 2018

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Advanced Search