02 February 2022, Mumbai:
The fourth Union Budget presented by Finance Minister Nirmala Sitaraman yesterday has been hailed as "progressive and people-friendly" by many leaders including Prime Minister Narendra Modi.
The points presented in the budget which provide a huge fillip to the domestic textile industry:-
1. Capital Allocations
- Rs 133.83 crore under Textile Cluster Development Scheme,
- Rs 15 crore each for both PLI scheme and PM MITRA (to bring in Rs 19000 crore investment over next 5 years).
- Rs 478.83 crore for textile capacity building,
- Rs 105 crore under Raw Material Supply Scheme to generate employment and productivity.
- Rs 17,683 crore to the Cotton Corporation of India (CCI) for procuring cotton under the MSP.
2. Tax Schemes:
- Raise in import duties for certain fabrics that can be produced domestically,
- Exempts in custom duties on import of trim & accessories.
- Budget allocation to attract fresh investments in textile
Industry view
The budget has been praised by many leaders across the textile and apparel industry.
Budget to wipe out CCI’s losses
Ravi Sam, Chairman, Southern India Mills Association (SIMA), opines the budget will help India become a superpower in coming decades.
"Budget to wipe out CCI’s losses incurred for procurement of over two crore bales of cotton during the last two years."
Addressing structural issues on taxation and raw materials enhances the overall competitiveness of textile industry, he feels.
However, he urges the government to exempt ELS cotton and sustainable cotton from 11% import duty.
Tax exemption to enhance fabrics market:
MA Ramaswamy, Chairman, PDEXCIL, appreciates the exemption offered on certain fabrics, embellishments and accessories.
"This will help the fabric and the made-up sector."
The PLI scheme for textiles will also help boost employment, he adds.
Ease of Doing Business 2.0:
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Appreciating the initiating of ‘Ease of Doing Business 2.0’ with industry stakeholders, Prabhu Damodaran, Convenor, Indian Texprenuers Federation says, the move will help the federation improve its ranking.
The extension of tax incentive period for new manufacturing units by a year will motivate industries regarding new Capex, he adds. He also hailed the government’s move to prioritize the use of technology for cotton crop assessment. This will help the industry get good market place intelligence.
Retail industry was as badly impacted in the pandemic:
The Clothing Manufacturers Association of India (CMAI) too hails the removal of import duty on accessories, embellishments, trimmings, buttons, etc, a long-time demand of the industry. CMAI believes this would particularly help apparel exports to be more competitive.
The Associations has welcomed the budget as a growth-oriented with several measures that encourages capital expenditure and other growth-related activities.
Extension of the ECLG Scheme for MSMEs by a year will help the apparel industry, since many units are still struggling to overcome the adverse effects of the pandemic.
However, it is unfortunate that the enhanced outlay for the scheme is restricted only for the hospitality industry – as the retail industry was as badly impacted in the pandemic.
Even under the current wave, retail continues to be impacted with lockdowns, partial closures, limited working hours, etc, CMAI said in a press release.
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