Excise duty on branded ready-made garments has been hiked from 10 percent to 12 percent. However, abatement of 55 percent from the retail sale price has been enhanced to 70 percent, the Finance Minister said today.
As a result, the incidence of duty as a percentage of the retail sale price will come down from 4.5 percent to 3.6 percent.
In many of the budgetary announcements made for the textile sector, the Finance Minister has exempted imports of automatic shuttle-less looms from payment of basic customs duty.
He also spoke about allowing up to 51 percent FDI in multi-brand retail trade, which has now been put in abeyance. Efforts are on to arrive at a broad based consensus in consultation with state governments, he said.
Mr Pranab Mukherjee has also exempted payment of customs duty on imports of aramid yarn and fabric used for the manufacture of bullet proof helmets.
Basic customs duty of 5 percent would be levied on imports of new automatic silk reeling and other specified textile machinery. Second-hand machinery would now attract basic duty of 7.5 percent.
A powerloom mega cluster will be set up in Ichalkaranji in Maharashtra at a cost of Rs 70 crore. Additionally, Weavers' Service Centres will be set up in Mizoram, Nagaland and Jharkhand for providing technical support to poor handloom weavers.
Mr Mukherjee also announced setting up of handloom clusters in Andhra Pradesh and Jharkhand in addition to the four mega handloom clusters already in operation.
The Finance Minister has also proposed to provide assistance in setting up of dormitories for women workers in five mega clusters relating to handloom, powerloom and leather sectors.
He has allocated Rs 500 crore to start a pilot scheme in the Twelfth Five-Year-Plan for promotion and application of geo-textiles in the North-East region.
Mr Mukherjee has reduced basic customs duty on wool waste and wool tops from 15 percent to 5 percent and also reduced customs duty on titanium dioxide from 10 percent to 7.5 percent.
He also revealed that the Government has recently announced a financial package of Rs 3,884 crore for waiver of loans of handloom weavers and their cooperative societies.
In order to boost the growth of Micro, Small and Medium Enterprises (MSMEs), Mr Mukherjee has proposed to set up a Rs 5,000 crore India Opportunities Venture Fund with SIDBI, in order to enhance availability of equity to MSME sector.
He informed that, two SME exchanges have been launched in Mumbai recently, to enable Small and Medium Enterprises (SMEs) greater access to finance.
With the objective of promoting market access of Micro and Small Enterprises (MSEs), the government has approved a policy which requires Ministries and CPSEs to make a minimum of 20 percent of their annual purchases from MSEs.
Of this, 4 percent will be earmarked for procurement from MSEs owned by SC/ST entrepreneurs.
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Fibre2fashion News Desk - India