ASSOCHAM moots tax holidays for textile machinery

18 Jan '08

2 min read

To reduce cost and attract fresh investment in the textile industry, The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has suggested `declaring tax holidays' for foreign and domestic investors in textile machinery segment, reforms to minimize procedural and bureaucratic hurdles and introducing Chinese method of compensation by linking wage bill with output level.

In a proposal submitted to the Ministers for Textiles and Finance, the Chamber President, Mr. Venugopal N. Dhoot has stated that alongwith the policy initiatives, firm level changes were also needed to strengthen the production base of the textile sector.

Planning tools like materials requirements planning (MRP) and Just-in-time (JIT) which are almost non-existent in India, needs to be introduced with some adaptation to Indian scenario.

Mr. Dhoot further said, the government should further open up the textile sector without delays by reducing customs duty on import of textile machinery and equipment for minimum next five years.

Simultaneously, removal of excise duty on domestic production is equally compelling to promote healthy competition and also encourage the research and development in the segment.

The ASSOCHAM Chief lamented that though there exist a large number of schemes for the various sub-segments of the textile industry, these need to be re-looked and through brought under single umbrella to realize the actual benefits. The non-performing schemes should be scrapped and the adequate budgetary provisions should be made for the schemes doing well.

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