Budget disappoints captains of textile & apparel sector

08 Jul '09

6 min read

The textile and apparel sector which had great expectations from the budgetary announcements and which could have helped the sector, move itself out of the deep depression phase since the unveiling of the economic crisis, was in for a shock, when the Finance Minister, Mr Pranab Mukerjee announced the budget.

Other than a few initiatives like increasing the TUF outlay and a few sops for exporters, the budget proceedings left a bitter taste in the mouth for the textile and apparel industry manufacturers and exporters, since other competitor countries like Bangladesh and Vietnam are marching ahead of India in exports from the sector, not to forget, its northern neighbour; China.

Fibre2fashion has taken the initiative to speak exclusively to a few captains from the sector to note their reactions and response to the initiatives announced in the budget. The overall reaction was that it was not a positive budget, at least for the textile and garment sector at large as most of the proposals put forward by the sector have not been met.

We began by speaking to Mr Venketesh, VP (Operations) at the Hyderabad based Suryajyoti Spinning Mills who said, “We would have expected a boost to labour intensive industries like textiles, but we have lost a big opportunity once again. India has already missed the boat vis-a–vis, Bangladesh, Pakistan and Vietnam, despite having the best technicians in the region”.

He added by saying, “The Govt should have given incentives to boost exports and except for the fact that, TUF outlay has been increased there is nothing worth the name in the budget for textiles. Overall the budget lacks spice. Individual tax benefits are good for the middle class, but in case of corporate tax there is no change”.

He continued, “FBT is partially withdrawn on business expenses but perquisites are rightly taxed and disinvestment has not been tackled in a big way mainly due to compulsions of coalition politics. There is a huge deficit and although intentions are good how will the govt mechanism ensure, that the benefits reach the common man, is the big question”.

“There is no mention of private partnership in spending this money especially in infrastructure and rural sector and there is no way growth can be guaranteed without private participation and we can only expect, that these issues are addressed in separate policies in future and expect the next budget to be more specific”, he concluded by saying.

Mr R L Toshniwal, Chairman and Managing Director of the Rajasthan based Banswara Syntex Limited said, “The Budget 2009–10 has been a great disappointment to the textile industry and it was expected that the budget will provide some relief to the textile industry by reducing the duty burden, whereas the duty burden has been increased”.

He said, “The increase in excise duty on cotton goods by 4 percent will only help some mills to recover their accumulated amount without showing any profits in the books, but on the other hand, the increase in excise duty on all synthetic fibres to 8 percent, will increase their burden, and the end-product will become more expensive”.

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