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'Budget 2016-17 has little for textile & apparel'
02
Mar '16
The Union Budget 2016-17 is good from an infrastructure, agriculture and rural development point of view, but it holds very little for the textile and apparel sector, according to industry experts.

“The 2016-17 Budget has been a pro-agriculture, pro-rural and pro-infrastructure Budget. Increased allocations in these sectors will definitely help strengthen the overall economy and enable long-term growth,” Tilokchand Kothari, MD of Visagar Polytex, said. “But the government has failed to look favourably into the textile sector in the current Budget.”

There was no mention of the various subsidies which could have boosted the growth of the industry. Emphasis on sector-specific skill development and opening of training centres is appreciated. But government needs to add training for imparting skills which will result in large-scale employment, he adds.

The Budget does not cater to apparel retailers, according to Arun Ganapathy, CFO of Spykar Lifestyle. Excise duty on branded readymade garments has been imposed under two options – 2 per cent tax without Input Tax Credit and 12.5 per cent with Input Tax Credit. This excise duty was withdrawn in Finance Bill, 2013, he informs.

The tariff value has also been changed from 30 per cent of MRP to 60 per cent of MRP.  This will be an additional cost on the apparel players, he says.

“As we are in the discretionary spend sector, no increase in personal income tax slabs or any major tax benefit for the common man is negative for us, as his net cash flow has not improved,” Ganapathy added.

The increase of service tax this year from 14.50 per cent to 15 per cent will have an adverse effect on the business economics, Harkirat Singh, MD of Woodland Shoes, said.

“The Budget is not too positive for the manufacturing and corporate sector,” he concluded. (MCJ)

Fibre2Fashion News Desk – India


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