Textile industry expects new schemes in Union Budget 2015

23 Feb '15

6 min read

The textiles industry is eagerly awaiting Union Budget 2015 as it is likely to unveil several new schemes and benefits for the industry. Introduction of GST, extension of TUFS, reduction of interest rates, taxation benefits, and investments in innovation and infrastructure are few of the many demands from the industry for the upcoming budget, reports Fibre2Fashion

Expectations from the Budget are high in industry circles. From laying emphasis on skill development and promoting cultivation of cotton and silk to introduction of labour reforms, from success-based incentive schemes and mechanism of fund rotation to promoting Indian textiles globally, several suggestions came forth from industry professionals that fibre2fashion spoke to.

“I hope the government does not yield to pressure from corporate units and gives away too much,” says Manikam Ramaswami, CMD of Loyal Textiles Mills. Ramaswami wants tight fiscal control and an extremely low fiscal deficit, even if oil prices rise by 20 per cent. He believes this alone with enthuse the Reserve Bank of India (RBI) to reduce interest rates, besides keeping inflation at sub-5 per cent.

Reduction of interest rates will benefit the textiles sector far more than the little savings that can be accrued otherwise through the Budget, which mostly benefits large corporate houses. It is more important to assist MSMEs to make profits by reducing interest rates. Unless we have lower costs for all, instead of higher retained profit for a few, we cannot expect sustainable growth, he remarks.

Availability of finances at competitive interest rates have remained a challenge for the industry for quite some time now, rues Rajesh Tripathi, vice president of GHCL. Companies are looking for some measures that will bring relief in this area, according to him.

Investment in technology and innovation

Opinions differ among experts over priority areas. But a common point that crops up even among these differing opinions is investment in technology and innovation, like an extension in the Technology Upgradation Fund Scheme (TUFS).

“TUFS should be extended in the coming Budget, and it should be categorised as per small/medium/heavy textile industries,” says NN Mahapatra, vice president (Business Development) of Colorant and vice chairman of Textile Association (India). He advocates a similar technology upgrading fund scheme across the dyes and dye intermediates industry as well, besides a special quota in the Special Economic Zones (SEZs).

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