Textile industry welcomed the Interim Budget 2019-20 announced by the Finance Minister, Piyush Goyal. Sanjay Jain, Chairman, CITI feels the budget will give a major impetus to the textile and apparel consumption in India by increasing the purchasing power of middle class and farmers. He feels, the announcements highlight the commitments of the present government to improve 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 MGNREGA, etc.
Goyal said the 2 per cent interest subvention for Micro, Small and Medium Enterprises (MSMEs) loans with a ticket size of Rs 1 crore will give a 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 textile and clothing industry which falls under MSMEs.
Textile sector outlay reduced
The outlay for textile sector has been reduced from Rs 6943.26 crores to 5,831.48 crore. The Budget allocation for A-TUFS has been decreased from Rs. 2, 300 crore to Rs. 700 crores. The Budget for ROSL has also been reduced significantly which is a cause for 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.
Procurement of Cotton by CCI under Price Support Scheme has increased from Rs 924 crore to Rs. 2018 crore. Allocation for Central Silk Board has also been increased, which is a welcome step by the Government.
Rahul Mehta, President, CMAI, welcomed the proposals of increasing tax exemptions limit and income support scheme. He believes, this will increase consumption and spending among the middle class and rural India.
Budget to benefit handloom weavers and MSME workers
P Nataraj, Chairman, The Southern India Mills’ Association (SIMA) hailed the announcement of Rs 6,000per year for farmers having below two hectares of land under Prathan Mandri Kisan Samman Nidhi Programme. He also welcomed the pension scheme for the workers in the unorganised sector enabling them to receive Rs 3,000 per month as pension after attaining 60 years as the textile industry is predominantly in the unorganised sector. According to him, the scheme would largely benefit handloom weavers and powerlooms and also the workers of several other small, micro units from other segments of the industry.
The decision of doubling the income tax exemption limit from Rs 2.5 lakh per annum to Rs 5 lakh per annum apart from enhancing the standard deduction limit from Rs 40,000 to Rs 50,000 was also approved by Nataraj as it would benefit several lakh middle class employees in the textile industry..
A boon for retailers
Krish Iyer, President and CEO of Walmart India feels the Budget gives huge resources in the hands of people. As it focuses on fiscal consolidation, it will bridge the divide between India and Bharat. Kunal Bahl, CEO & Co-founder of Snapdeal welcomed tax exemption upto Rs 5 lakh income as it will increase consumption, both through online and offline retail.