Indian textile sector presents wish-list from Union Budget

07 Jul '14

4 min read

MNREGA benefits should be only given to those who are not employable by the manufacturing sector, streamlining scattered textile production chain before implementing GST, a route to liquidate CENVAT balances from balance sheets, reduction in basic custom duty on PTA, MEG, PSF, POY and also textile machinery and SAD on all of these to be lowered from four percent to zero percent.

These are a few of the wish-list of the Indian textile industry on its expectations from the Union Budget to be announced on July 10.

Other than timely disbursement of TUFs payment, promotional schemes like focus markets to reach out to untapped overseas countries, Mr JC Soni, Business Head at BSL Suiting’s Ltd touched upon the gravest concern – ‘Shortage of labour’ haunting the Indian textile sector since the introduction of the guaranteed employment scheme of the government – MNREGA.

He says, “MNREGA benefits should be only given to those who are not employable by the manufacturing sector. Those employed under MNREGA schemes, should first be encouraged to go through employment exchanges and only and only if suitable employment is not available in the manufacturing industry, should they be then given employment under MNREGA. This to a great extent will address shortage of labour issue haunting the manufacturing industry”.

Mr RK Dalmia – Senior President overseeing Birla Century, Century Yarn and Century Denim - all divisions of Century Textiles and Industries Ltd is of the opinion that the government should come out with a very growth oriented budget, because overall growth in the economy, will also mean growth for the textile sector. He also expects the government to put in place fast decision making systems.

On implementation of GST, he says, “Before implementing GST, the government should first look in to the entire textile production chain. Currently after spinning, the entire production chain is scattered. Weaving is done at one location, while fabric processing is done at another and garment stitching is done at a third. This will make the implementation of GST very difficult, so the government should begin by first streamlining the production system”.

Mr Vikas Ladia – MD at Rajasthan Syntex Ltd wants the government to find a route to liquidate CENVAT balances, since the MMF textile processing industry has accumulated CENVAT balances, because of an inverted duty structure.

He says, “We have 12% duty on raw materials and 12% on yarn, but the value addition from fibre to yarn is not much, because of which we have accumulated excise duty in our books, so we expect some kind of mechanism to be put in place to clear the same. I also would want the GST regime to be put in place at the earliest to remove hindrances in sale of goods within India and ensure free movement of goods within the country. Excise duty on MMF should also be reduced from 12 percent to 8 percent.”

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