Textile industry related budget policies at a glance
The Finance Minister, Mr Pranab Mukerjee, today presented the Union Budget for fiscal year 2010-11 before Parliament, in which he announced a few policy initiatives related to the textile and apparel sector and for the corporate sector in general. The Union Textiles Ministry has been allocated a budget of Rs 4,725 crores for 2010-11, which is lower than Rs 5912.42 crores allocated in the previous budget. Fibre2fashion is pleased to bring you the excerpts of the announcement.
He proposed to launch an extensive skill development programme in the textile and garment sector by leveraging the strength of existing institutions and instruments of the Textile Ministry. The resources of the private sector will also be harnessed by incentivising training through an outcome - based approach. Through these instruments, the Ministry of Textiles has set an ambitious target of training 30 lakh persons over 5 years.
The textile cluster for knitwear in Tirupur in Tamil Nadu is a major contributor to the country's hosiery exports. He proposed to provide a one-time grant of Rs. 200 crore to the Government of Tamil Nadu towards the cost of installation of a zero liquid discharge system at Tirupur to sustain this industry, which provides livelihood to lakhs of persons, without undermining the environment.
Government has provided interest subvention of 2 percent on pre-shipment export credit up to March 31, 2010 for exports in certain sectors. He proposes to extend the interest subvention of 2 per cent for one more year for exports covering handicrafts, carpets, handlooms and small and medium enterprises.
A loan agreement for US $150 million has been signed between the Government of India and the Asian Development Bank on 22nd December, 2009 for implementing the comprehensive Khadi Reforms Programme. This programme will cover 300 selected Khadi institutions.
Unlike the time he presented the last Budget, symptoms of economic recovery are more widespread and clear-cut now. The three fiscal stimulus packages that the Government introduced in quick succession have helped the process of recovery significantly. The improvement in our economic performance encourages a course of fiscal correction even as the global situation warrants caution. Therefore, he proposes to partially roll back the rate reduction in Central Excise duties and enhance the standard rate on all non-petroleum products from 8 per cent to 10 per cent ad valorem.
In the wake of spiralling petroleum prices, Government provided full exemption from basic customs duty to crude petroleum and proportionately reduced the basic duty on refined petroleum products in June, 2008. Compared to the international price of the Indian crude basket of US$ 112 per barrel at that time, the prices are much softer at present. In view of the pressing need to move back to a fiscal consolidation path, he proposes to restore the basic duty of 5 per cent on crude petroleum; 7.5 per cent on diesel and petrol and 10 per cent on other refined products. I also propose to enhance the Central Excise duty on petrol and diesel by Re.1 per litre each.