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The Southern India Mills’ Association

Committed to Foster the Growth of the Textile Industry

Insufficient allocation worries textiles sector

Insufficient allocations of funds in the Union Budget for ‘key focus areas’ in textiles sector are likely to impede growth of business opportunities in a cluster like Tirupur, which is struggling hard to retain competency in the global market. A deeper analysis of the budgetary allocation for 2018-19 fiscal year shows that only 24 % of the planned outlay for textiles sector was earmarked for development activities with the rest pegged towards ‘fixed costs’ such as Amended Technology Upgradation Fund scheme, procurement of cotton, and remission of State Levies.
“It is a matter of concern that allocation for development activities in textiles sector has gone down from Rs. 2,051 crore to Rs. 1,680 crore in the Budget for 2018-19. “The allocation should have been more towards development activities considering that the textile industry is reeling under immense monetary pressures on account of modified schemes for reimbursement of central and state taxes post-implementation of Goods and Services Tax”, said S. Dhananjayan, a senior chartered accountant.
Template allocation technocrats and industrialists feel alike that instead of making template allocation of funds, the attention should have been on capacity building initiatives, textile infrastructure other than machinery upgrade, implementation of lean manufacturing practices, and research at the cluster-level. Their worries of template or ritualistic type of allocations were substantiated in the cases of funds assigned for setting up of workers’ hostel, which stood at just Rs. 76 lakh for the entire country, and absence of any specified funds for development of knitwear sector that generates annual export turnover of just over Rs. 50,000 crore. “With the total apportioned Rs. 76 lakh, workers’ hostel could not be set up even in one cluster even though the said facility is a key necessity to retain predominant migrant skilled labourers in the midst of soaring house rentals”, said Tirupur Exporters Association president Raja Shanmugam.