Responding to the proposals made in the budget for the textile sector comprising of a fair share of Micro, Small and Medium Enterprises (MSMEs), Apparel Export Promotion Council has raised that the budget only partially addresses the concerns of the industry.
Talking to KNN, Animesh Saxena, an MSME garment exporter said that the sector was eyeing at the budget for big announcements but not much has been addressed by the government.
Explaining the concern further, Saxena said that due to the problems arising because of the GST and the overall slowed demand, apparel sector in the country has shown negative growth as compared to the growth from the previous years.
“For December alone, there was a negative growth figure of 10-12 per cent, with such situation existing for the textile MSMEs, we expected the government to come up with boosters”, Saxena said.
H K L Magu, Chairman, Apparel Export Promotion Council welcomed the reduction in corporate tax for SMEs with turnover up to Rs. 250 Cr.
“The industry is happy for the increase in the budget allocations for the apparel package to Rs. 7148 Cr. We hope that this will improve RoSL reimbursement, which has dried up since June, 2017”, AEPC said in a release.
The apparel industry is a women oriented industry – the reduction in the women’s contribution to EPF to 8% from the present 12% will encourage women participation in this sector further, the release further added.
Explaining the concerns of the sector further, AEPC said that the apparel industry was one of the worst hit after demonetisation and GST roll out, as a huge part of the supply chain was outside the tax regime before GST.
The industry is presently grappling with severe financial crunch due to the non-receipt of GST refunds and RoSL refunds besides other procedural issues towards transition to GST. The industry was hoping for some financial support for mitigating the financial crunch, especially because the sector also saw severe reduction in the drawback and RoSL benefits.
The industry is looking forward to increased interest subvention from the existing 3% to 6%, to help industry be competitive, as several other countries have much lower interest rates, the release added. Presenting the Union Budget in Parliament, Jaitley informed that an outlay of Rs.7148 crore has been provided for the textile Sector.