Garment exporters suggest 50% hike in depreciation allowance

04 Feb '06

2 min read

Higher rate of depreciation allowance has been asked for because exporters in the knitwear industry have been facing severe competition abroad and their technology change require frequent replacement of machines in between, said A Sakthivel, President of the Tirupur Exporters Association, in a letter submitted to the Government in a pre-budget memorandum.

The association has suggested increasing the depreciation allowance from the present rate of 15 per cent to 50 per cent so that the garment industry can effectively face competition from exporters belonging to other countries.

Government had allowed depreciation allowance of 20 percent for investments made beyond October, in the first year, but it was limited it to 10 per cent and balance 10 per cent could not be carried forward to the next year, he said.

Garment industry can offer jobs for a minimum of 200 days in year so government should include it under the employment guarantee programme, said the association.

Five million jobs can be generated with daily wage earnings of Rs 70 by the garment industry, Sakthivel added.

Garment units whose labour wage payout is 25 per cent higher than the previous year, may be given due consideration in Income Tax assessment, he suggested.

Suggestions were made to the government to reduce excise duty on man-made fibres and yarns to make it at par with cotton yarn in order to increase content of synthetic fibre use in fabric.

This will help focusing on production of non-cotton garments to widen exports, he pointed out.

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