The textile industry has welcomed the Union Budget and thanked finance minister P Chidambaram for accepting some of its long-awaited requests, such as removing excise duty on branded garments and restoring zero excise duty for cotton and spun yarn at the yarn, fabric and garment stages.
?The continuation of the Technology Upgradation Fund (TUF) scheme and Scheme for Integrated Textile Parks (SITP) to the 12th Five-Year Plan period, zero excise duty on branded readymade garments and made-ups, reduction in customs duty on imported textile machinery and parts from 7.5% to 5%, increased grant of R10 crore to the textile parks under SITP and investment allowance of 15% to manufacturing companies investing more than R100 crore in plant and machinery during the period April 1, 2013 to March 31, 2015 are some factors that will boost the textile industry,? said S Dinakaran, chairman, Southern India Mills? Association (SIMA).
While hailing the Budget announcements, A Sakthivel, president of Tirupur Exporters’ Association (TEA), the knitwear capital of India, said: ?The positive measures would help sales of domestic garments , which, in turn, would help lakhs of workers in the sector.?
?The move of not increasing direct and indirect taxes and continuance of the TUF scheme in the 12th Plan with an investment target of R1,51,000 crore with an out lay of R2,400 crore in 2013-2014 for the purpose is a welcome step. The continuance of TUF would increase investment and help in upgrade of machinery with the latest technology, which is required to produce quality garments to fulfil the needs of buyers. The special fund allocation for setting up of apparel parks and implementation of integrated development scheme to address environmental concerns of the textile industry would definitely help it grow further,? Sakthivel added.
A senior official of Apparel Export Promotion Council (AEPC), said: ?The finance minister’s announcement on setting aside R5,000 crore for helping SME sector through SIDBI is a welcome step.
The benefits/preferences enjoyed by micro, small and medium enterprises enjoyed will stay with them for up to three years after they grow out of the category in which they obtained the benefit. This benefit will go a long way in promoting employment.?
?The announcement of vocational courses offered by the institute affiliated to the state council of vocational training and testing activities would be in the negative list for the service tax. We are confident that the courses offered by our Apparel Training and Design Centres (ATDCs) would fall under this category,? Sakthivel maintained.
According to Dinakaran, special schemes for the powerloom sector under TUF and SITP, additional ince ntives for apparel units and a new scheme with an outlay of R500 crore for textile processing development with benefits up to R50 crore per park would definitely help in addressing technology obsolescence issue and pollution issues, the major threats to the survival of these sectors.
He hoped that the global export share would substantially improve with these schemes in the 12th Plan period.
Sakthivel also welcomed the enhancement of the refinancing capability of SIDBI from the current level of R5,000 crore to R10,000 crore for year, which would be of great support to the SME sector. He also welcomed the announcement on continuance of benefits for three years for SMEs after they graduated to a higher category.
The allocation of R1,000 crore for National Skill Development Corporation (NSDC) for skill upgradation would enable the textile industry to improve its competitiveness as the industry is one of the major beneficiaries under the sector skill development of the NSDC programme, Dinakaran maintained.
