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Textile industry gives thumbs up to budget 2020-21

04 Feb '20
4 min read
Pic: Shutterstock
Pic: Shutterstock

The setting up of Technical Textiles Mission, abolition of anti-dumping duty on purified terephthalic acid (PTA), correction of inverted duty structure in GST, review of Rules of Origin under the existing free trade agreements (FTAs), and the launch of NIRVIK scheme announced in the budget 2020-21 have been welcomed by the textiles industry.

"The abolition of anti-dumping duty on PTA will immensely benefit synthetic yarn spinners and downstream segments like fabrics and garments including furnishing fabrics made from polyester and blended yarns. It was a long pending demand of our association which was finally answered," Indian Spinners Association secretary general TV Bhavadas said.

The ₹1,400 crore budget to promote technical textiles in the country is a welcome move, said Prashant Mohota, MD, Gimatex Industries Pvt Ltd. He added, "Our important concerns for the textile sector included the correction of the inverted duty structure, re-visiting of various FTA’s and few custom duty structures. While the government is going to address these, we were also expecting strict norms for import and wanted benefit to be given to cotton yarn in relation to various state level taxes.

"The NABARD refinance scheme for NBFCs and cooperatives for warehousing and agri-based products in really appreciated. The special scheme for MSMEs like NIRVIK, TReDs and new financing model for working capital will give boost to MSME growth. The inclusion of power generation for lower income tax rates is the bonus."

"One of the main reasons for the slump in demand for the textile industry has been the rapidly falling consumption pattern of the middle class and the rural belts. The budget has opened avenues to boost purchasing power," according to Rajendra Agarwal, MD, Donear Industries Ltd.

"The textile industry has been one of the leading employment generators in our country. With easing up business operations and aiding technological developments, they are opening other avenues for indigenous manufacturers. Simpler procedures will enable textile companies to invest in product extensions. Additionally, the National Technical Textiles Mission aims to bolster indigenous production capabilities and at the same time promote eco-sustainable solutions for waste management. With imports being drastically cut down, there is less opportunity for new entrants and that strengthens the position of local players who can fill those niches. Therefore, there are good tidings expected for the textile industry from a consumption, employment generation and boosting demand standpoint," added Agarwal.

"I am very pleased with the budget passed for the textile sector. The crisis that the industry was facing for the past four years has finally been acknowledged and significant reforms have been made to help the sector see its true glory," said Mansi Gupta, Founder and CEO, Tjori. "Government has been extremely responsive and has been listening to the industries, which has resulted in the government deciding to take measures like reshuffling of GST rates, allowing refund of accumulated taxes in case of textiles, etc. The outlay of ₹1,480 crore for technical textiles will help the sector develop skills in technological development, boost exports and ensure cost effective ways of production. The personal income tax rebates will definitely lead to happy customers which would in-turn lead to better markets."

The ₹761.90 crore budget allocation for Amended Technology Upgradation Fund Scheme (ATUFS) is a considerable increase of about 50 per cent compared to last year, which is good for the borrowers under the scheme. However, overall budget allocation of ₹3,514.79 crore to the textiles ministry is about 27 per cent less than the current year 2019-20, said Bhavadas.

The textile industry plays a very significant role in the economy of the country by contributing over 13 per cent of the industrial output, and over 2 per cent to the GDP of India.

Fibre2Fashion News Desk (WE-DD)

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