The textile sector in Punjab which has been already traversing a difficult phase on account of repeated power cuts and dearth of labour is now further distressed as the Centre on April 29 announced its decision to do away with the four percent duty drawback.
Whereas the government in the past had already pulled back the 7.67 percent Duty Entitled Pass Book (DEPB) Scheme for cotton yarn, now it has withdrawn the duty drawback. Ashish Bagrodia, a prominent yarn exporter from Punjab and President of North India Textile Millers' Association said.
He said, duty drawback was not a stimulus rather it was only meant to reimburse the duties paid on all the products with an intention to keep the exports tax free and thereby create a level playing field in the overseas market.
He further stated that, on recommendations from the Textile Ministry, since May 1 , yarn producers had lowered the yarn prices from Rs. 175 to Rs. 170 for 30s count, to facilitate the development of garment and handloom sector.
During summers the energy crisis in Punjab leads to a rise in the cost to the mills, who then have to operate using captive power, which is three times more expensive than the power, supplied by the state agencies.
Fibre2fashion News Desk - India