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Textile firms appreciate tax cut for MSMEs in Budget
Feb '17
Textile companies believe that tax reduction for micro, small and medium enterprises (MSMEs), that generate the maximum employment in the country, will help smaller retail entitites and drive the growth engine. The abolition of FIPB (Foreign Investment Promotion Board) to ease the flow of FDI is also likely to reap good benefits by speeding up the process.

This year’s Union Budget is an inclusive budget with a clear focus on agriculture, infrastructure, digitisation and employment generation, Deepak Chiripal, CEO of Nandan Denim Limited told Fibre2Fashion.

“MSMEs are the backbone of the industry and generate the maximum employment. Tax cut for the MSMEs with an annual turnover of Rs 50 crore is a welcome gesture and will drive the growth engine as most of India’s companies will get the benefit of 5 per cent tax reduction, which will be a relief for them,” said Chiripal.

He also said that labour reforms were much sought demand and budget announcement will definitely help foster a conducive labour environment leading to harmonious labour relations, which will further lead to higher productivity.’

“Government has increased allocation to Prime Minister Employment Generation Scheme by 3 times which will definitely help to achieve employment generation targets. Abolition of FIPB (Foreign Investment Promotion Board) to ease flow of FDI is a good move which will reap good benefits as it will speed up the process,” added Chiripal.

The increased tax limit slab is also likely to boost the market sentiments after a sluggish demand witnessed due to the liquidity crunch post demonetisation.

“Expanding tax net by increasing tax limit slab up to Rs 5 lakh will give more money into low-medium income groups. This move will give more money into hands of such people, which will trigger more demand in markets. After short term sluggish demand due to demonetisation, this will surely help to boost the market sentiments,” noted Chiripal.

The reduction in personal income tax is expected to result in an increase of disposable income of individuals.

“As anticipated by us, the reduction of personal income tax would increase the disposable income in the hands of individuals. As mentioned by the finance minister, about 96 per cent of individuals have an income of less than Rs 5 lakh and they tend to gain on reduction in income tax rate for income up to Rs 5 lakh,” Arun Ganapathy, CFO Spykar Lifestyle Pvt Ltd told F2F.

Regarding demonetisation, Genepathy sadid, “The statement of the Finance Minister that the impact on demonetisation will not spill over to the next year is a welcome one and would augur well for the industry. The reduction in corporate tax rates for SME corporate will help smaller retail entities.”

“Overall, the budget was as anticipated by us,” concluded Ganapathy. (KD)

Fibre2Fashion News Desk – India

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