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Union Budget 2020-21: Few hours to go

31 Jan '20
4 min read
Pic: Shutterstock
Pic: Shutterstock

Businessmen, investors, market analysts, and all top honchos will be glued to their smart screens, when finance minister Nirmala Sitharaman presents Union Budget 2020-21 on February 1. While revival of the economy is top on agenda, increase in exemption limit in tax rates is high on the wishlist of industry stakeholders who want a revival in consumer demand.

Simplification of compliance and reduced regulatory burden are some of the demands from the industry and voicing the same, RS Jalan, managing director, GHCL said, "Our GDP today stands at about $2.79 trillion and doubling it in the next five years will require various growth-based and consumption led reforms especially when the Indian economy is facing a period of slowdown. To ensure that the Indian industry is ready to support the vision of $5 trillion economy the Budget 2020-21 needs to allow more freedom and ease of doing business. The Government needs to ensure simplification of compliance and reduced regulatory burden which is slowing down investment."

Speaking about the textile industry, Jalan said, "The Government announced and notified RoSCTL scheme to support one of the most ancient and labour-intensive textile industry, but even after nine months the mechanism of disbursal has not been framed and industry is still waiting for this much needed support. It also needs to introduce schemes in addition to RoDTEP (Remission of Duties or Taxes on Export Products) for Indian exporters to ensure that they get the same support as their competitors get from their governments."

Sustainability is currently the buzz word, and demand for eco-friendly manufacturing is increasing in the textile industry. According to Zenitex CEO Viral Desai "the textile industry is wading through a tough time with global competition and global pressure to curb pollution (both air and water). To promote sustainability, the Government should setup a nodal agency which can filter and rank industries according to the usage of renewable energy, sustainable colours, etc. The government can facilitate networking of such industries for associations and potential investors, promoting them through the 'Made in India' label so that they can have tie-ups, and work-based contracts with international players. This way more and more entrepreneurs will shift towards sustainability model of business."

The government should open newer avenues for businesses to flourish, feels Mithi Kalra, founder of fashion label Mithi Kalra. "On the innovation front, there is a need to give a boost in innovation across manufacturing and services sectors. In a manner like that of investment allowance of the past, eligible innovation projects that conserve natural resources such as water, need to be encouraged. Power and materials that lead to employment or exports should get tax credits at least to the extent of a quarter of the investment."

Will the budget offer anything for the retail sector is an obvious question, specially at a time when a gloomy outlook stares the sector. Sharing his expectations from budget, Dharmender Khanna, Lotto brand head, said, " Some of the challenges we face are maintaining multiple warehouses, streamlining multi channels of online and offline retail, high tariffs on imports among others. We are hoping that the Union Budget acknowledges some of these challenges and provides solutions for these. Also, the current import duty on footwear is 25 per cent, which is on the higher side and any further increase in this will make India an unviable market for an international brand like ours."

Another demand from budget is steps to strengthen the NBFC sector. "NBFCs have been instrumental in ensuring the last mile credit for the MSME sector which employs almost 50 per cent of the Indian workforce. NBFCs with increased liquidity will help boost investment, job creation thus enhancing consumption and growth in the economy," adds Jalan.

With every sector—from textile manufacturing, MSMEs to retail—having their own set of demand, it would be interesting to see how the finance minister plays a balancing act.

Fibre2Fashion News Desk (WE-DD)

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