Explaining the proposals that would benefit the garment industry, Rahul Mehta, president of The Clothing Manufacturers’ Association of India (CMAI) said that the reduction of corporate tax to 25 per cent for small companies with turnover up to Rs.50 crore will cover a large number of garment units since the industry is mostly in the SME sector. “Reduction in the individual income tax rate from 10 per cent to 5 per cent for individuals with income ranging from Rs 2.5 to 5 lakh and additional allocations for agriculture and rural sectors will improve the purchasing power of rural poor who form a large part of the clientele of unorganised and small garment manufacturers,” said Mehta.
“The announcement to reduce the income tax rate for MSMEs will benefit cores of small business units in both the manufacturing and services segments. It is a clear encouragement to businesses to move over to the formal economy,” said Pankaj Patel, Federation of Indian Chambers of Commerce and Industry president. “The reduction in the tax rate for individuals in the lowest income tax slab will leave more disposable income in the hands of the people and will enhance consumption demand in the economy which had taken evident hit due to the demonetisation move. The finance minister has gone the Keynesian way to stimulate growth in the economy through higher demand,” added Patel.
Terming the budget as positive, wide ranging and inclusive, Ujwal Lahoti, chairman of Texprocil appreciated that the government will continue to take measures to boost growth as well as employment generation. Lauding the reduction in corporate income tax for medium and small enterprises up to 50 crore turnover, he said that it will benefit a large number of MSMEs in the textile sector also.
“Budget 2017-18 is one of the best budgets in the recent times. The government has also widened and deepened the additional drawback scheme. As far as textile industries are concerned the government has already given us what we were looking for. It is commendable that the government has retained all the schemes for textiles. It is a very balanced and realistic budget with the government focusing on overall development of the economy,” Rakesh Vaidya, former chairman of Apparel Export Promotion Council told Fibre2Fashion.
“The policies introduced in the budget will be fruitful in the long run. With people spending more, our business will also grow. Reduction in the income tax deduction of individuals is good news. It will have a direct impact on their purchasing capacity,” said Southern Gujarat Chamber of Commerce and Industry president BS Agarwal.
Speaking of investing in infrastructure, Jitendra Vakharia, president of South Gujarat Textile Processors Association said, “This budget has focused on improving the condition in the rural areas. This will benefit the industries, particularly textiles, with the availability of raw materials in abundance and at an amiable price.”
“Tax reduction for MSMES will provide some cushion to the textile MSMES, both in production and exports. Further reduction of customs duty on nylon is likely to increase the competitiveness in the nylon product chain manufactured in India,” said The Synthetic & Rayon Textiles Export Promotion Council deputy director Kripabar Baruah.
Fibre2Fashion News Desk – India
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