Union Budget ignores textile sector expectations, NITMA

20 Mar '12

2 min read

The Northern India Textile Mills Association (NITMA) President, Mr. K K Agarwal stated that the budget has not offered to the labour intensive textile and clothing sector which is the largest net foreign exchange earner in the manufacturing sector, contributing to around 17 per cent of India's exports and 14 per cent of industrial output and providing direct and indirect employment to over 90 million people, primarily the weaker sections of the society and women.

The sector is reeling under crisis due to various external factors and it needs Government support at this critical juncture. The industry in its recommendations have asked for reduction of excise duty for MMF, the duty has been increased to 12% from 10%, and this step will make the domestic industry less competitive with the competing countries.

However, Shri Agarwal stated that abolition of the custom duties on automated suttleless looms and its parts is welcome step as this will help the weaving industry. The concessional rate of 5% custom duty applicable to several other machines has been maintained for new machines. The increase in service tax to 12% will have an adverse impact on the industry; this could have been avoided since GST would become operational in August 2012, The government should have delayed the rate increase till GST is implemented. The Government has not reduced the CST from 2% to 1%.

Besides this, there is no reference to the TUF Scheme in the Budget and he hoped that a separate announcement in this regard would be made in the 12th Five year plan.

Northern India Textile Mills Association (NITMA)

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