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FM announces new textile mega-clusters in Budget 2014-15
10
Jul '14
India’s Finance Minister Arun Jaitley has proposed setting up of new textile mega clusters in his maiden Budget in the Parliament today. The mega-clusters will be set up at Bareily and Lucknow in Uttar Pradesh, Surat and Kuttch in Gujarat, Bhagalpur in Bihar, Mysore in Karnataka, and one in Tamil Nadu. For this, a sum of Rs. 200 crore has been allocated.
 
In Budget 2014-15, the Finance Minister also proposed to set up a Trade Facilitation Centre and a Crafts Museum with an outlay of Rs. 50 crore to develop and promote handloom products and carry forward the rich tradition of handlooms of Varanasi, where a textile mega-cluster would also be supported.
 
Among other new announcements, a Pashmina Promotion Programme (P-3) and a programme for the development of other crafts of Jammu & Kashmir will be started with an initial outlay of Rs. 50 crore.
 
A sum of Rs. 30 crore has been allocated for setting up a Hastkala Academy for the preservation, revival, and documentation of the handloom/handicraft sector in Public-Private Partnership (PPP) mode in Delhi.
 
Further, to boost domestic manufacture as also to address the issue of inverted duties, the Finance Minister proposed reduction of the basic customs duty (BCD) on specified inputs for manufacture of spandex yarn from 5 percent to Nil.
 
For encouraging new investment and capacity addition in the chemicals and petrochemicals sector, the Budget proposes reduction in the basic customs duty on reformate from 10 percent to 2.5 percent; on ethane, propane, ethylene, propylene, butadiene and ortho-xylene from 5 percent to 2.5 percent; on methyl alcohol and denatured ethyl alcohol from 7.5 percent to 5 percent; and on crude naphthalene from 10 percent to 5 percent.
 
“To encourage exports of readymade garments I propose to increase the duty free entitlement for import of trimmings, embellishments and other specified items from 3 percent to 5 percent of the value of their exports,” Mr. Jaitley said.
 
“To set at rest an on-going dispute, I propose to exempt PSF and PFY manufactured from plastic waste and scrap including PET bottles from excise duty with effect from 29th June, 2010 to 7th May, 2012. I also propose to levy prospectively a nominal duty of 2 percent without Cenvat benefit and 6 percent with Cenvat benefit on such PSF and PFY,” said Mr. Jaitley.
 
For cotton, both ginned and baled, service tax on loading, unloading, storage, warehousing and transportation is proposed to be exempted.
 
For sports gloves, the Finance Minister prescribed a concessional excise duty of 2 percent without Central Value Added Tax (Cenvat) benefit and 6 percent with Cenvat benefit.
 
In order to incentivize small entrepreneurs, the Budget proposes providing investment allowance at the rate of 15 percent to a manufacturing company that invests more than Rs. 25 crore in any year in new plant and machinery. This benefit will be available for three years i.e. for investments upto March 31, 2017. This Scheme will continue to operate parallel to the scheme announced last year for the period till March 31, 2015.
 
In addition, the proposal to develop an entrepreneur friendly bankruptcy framework for SMEs would be helpful to small units in the textiles industry.
 

Fibre2fashion News Desk - India


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