Interim Budget will boost textile consumption: CITI

“The present budget has focused on empowering the rural India and the middle class of the economy. The new announcements have highlighted the commitments of the present government to improve the overall socio-economic condition of the country by touching upon the healthcare sector, infrastructure, ease of doing business, more beneficial schemes for low income strata of the society by enhancing their purchasing power, protecting them through pension scheme, minimum income through MNREGA, etc,” CITI chairman Sanjay K Jain said in a press release.

Jain pointed out that the announcement of 2 per cent interest subvention for micro, small and medium enterprises (MSMEs) loans with a ticket size of ₹1 crore has given a big thrust to MSMEs to boost employment and economic growth. “A few banks exiting PCA, relaxation for MSMEs on funding and interest rates will benefit 80 per cent of the textiles and clothing industry which falls under MSMEs,” he said.

The Budget reduces the total outlay for the textile sector from the revised estimate of ₹6,943.26 crore to ₹5831.48 crore. For A-TUFS, the budget allocation has been steeply decreased from ₹2,300 crore to ₹700 crore. “Last year only about 30 per cent of the budget could be used due to low disbursements, however, to clear the carried forward obligations, a much higher allocation will be needed. The budget for ROSL has also been reduced significantly which is a cause of great worry to the industry as this could lead to working capital blockages and delay in ROSL receipts. Further the industry has been expecting upward revision in ROSL rates which would need more funds,” Jain said.

The budgetary allocation for procurement of cotton by CCI under Price Support Scheme has been increased from ₹924 crore to ₹2,018 crore. “This move of the government to doubling the income of the farmers is well appreciated by the industry. However, our request to the government is to introduce Direct Subsidy System for the cotton farmers as it will ensure no direct impact on cotton prices,” said Jain.

CITI has also welcomed that increase in allocation for Central Silk Board.

“Though the textiles and clothing industry is expected to be a major gainer due to the extra funds which flow into the hands of the section of the society where incremental marginal expenditure on clothing is very high, the industry hopes for greater allocation of funds for the two flagship programmes of the textile ministry – A-TUFS and ROSL,” Jain said. (RKS)

Fibre2Fashion News Desk – India