Some of the announcements in the Union Budget on Thursday are expected to benefit the textile and clothing industry. However, the allocation for schemes such as Remission of State Levies (ROSL) might not meet the industry requirements, according to the textile associations.
P. Nataraj, chairman of the southern India Mills’ Association, has said the government allocated Rs. 2,164 crore towards ROSL as against Rs. 1855 crore for 2017-18 for the garment and made up exports. The amount is inadequate as there is a huge backlog to be cleared even for the current financial year. The timely disbursement of dues is essential to ensure working capacity for the industry. He welcomed the announcement of a scheme for MSMEs to address issues related to NPA and stressed assets.
According to Sanjay Jain, chairman of Confederation of Indian Textile Industry, the allocation to Cotton Corporation of India has gone up from Rs. 303 crore to Rs. 924 crore for MSP operations. This will not help the industry and this year, the market prices are higher than the MSP. The hike in basic customs duty on silk fabric from 20 % to 10 % will save the industry from dumping from China. The minimum support price (MSP) on cotton will be 1.5 times the production cost. This will benefit the farmers. However, it will result in higher inflation for consumers as cotton-based textiles are 70 % of the consumption in the country.
Chairman of Cotton Textiles Export Promotion Council , Ujwal Lahoti, hoped the ammount allocated for ROSL will cover fabrics too. It is at present only for garments and made ups.
The Clothing Manufacturers’ Association of India president Rahul Mehta has said that the focus on rural economy will push the demand for apparel in the domestic market. The reduction in contribution towards provident fund by women employees to 8 % for the first three years will benefit the apparel sector which employs women in large numbers. According to the Indian Texpreneurs Federation, the Corporate Tax reduction for SMEs with less than Rs. 250 crore turnover will benefit the small and medium-scale units in the textile sector. The units can now plan expenditure on solar investments. investments. The focus on agro sector is the need of the hour and the budget has done it, said Prabhu Dhamodharan, convenor of the federation.