Budget’s focus on capex will stimulate economic growth: Balkrishan Goenka, chairman, Welspun Group

The Union government’s prudent initiatives to provide impetus to the textiles and apparel sector is truly commendable.

budget column
In a first, the government has started planning for the next 25 years being part of a long-term vision.

By Balkrishan Goenka

The Indian textile industry poses as one of the most important pillars and the biggest growth driver of the Indian economy. Contributing 7% to industrial output (by value), 2% to India’s GDP, and 17% of India’s export earnings, this sector is a source of direct employment opportunities for over 45 million people. These make it the second-largest employer in India after agriculture.

The Union government’s prudent initiatives to provide impetus to the textiles and apparel sector is truly commendable. To address challenges and for the growth of textile exports, the central government continues to introduce progressive initiatives and policies.

We welcome the high-growth oriented Union Budget announced by finance minister Nirmala Sitharaman for 2022-23. The outlay for capital expenditure has been sharply stepped up by 35.4%, from Rs 5.54 lakh crore to Rs 7.50 lakh crore. Private investments by the manufacturers are likely to follow suit, riding on the PLI Schemes for the textiles and other sectors.

In a first, the government has started planning for the next 25 years being part of a long-term vision.

The climate change agenda will get a boost from the battery-swapping policy and other policy measures like green bonds, additional allocation for PLI for solar PV modules, coal gasification projects, sovereign green bonds, etc.

The FM has further announced various steps in the direction of Digital India like 5G spectrum allotment, fast implementation of optic fibre in rural area and land digitisation.

A major infrastructure boost will take the economy into a new trajectory of growth. Laying emphasis on development of infrastructure and smooth functioning of supply chains across the country is essential in contributing to the growth and creation of employment in this sector. We are hoping that the issue of inverted duty structure in the textile value chain should also be addressed.

The US-China trade war and the subsequent imposition of additional duties and restrictions on Chinese textile & apparel imports have led to importers in the US scouting for other destinations such as India. China-plus-one has created a growth window for the Indian textiles segment, and the PLI scheme can give the sector a further boost. India is one of the largest producers of cotton, and along with high-tech machinery and availability of skilled labour, we can become a major exporter of apparel.

We even have the largest yarn-spinning capacity (20% of the world’s capacity) and could easily outperform markets like Bangladesh, Vietnam and Sri Lanka. This has led to an opportune moment to grow quickly and counter rising competition from Vietnam and Bangladesh. India can achieve its target of $100 billion in textile exports over the next five years with proper framework, longer-term policies, better planning and continued government support.

The Indian textile industry is well poised to grab the opportunities in the international market. The free-trade agreements (FTAs) with major export destinations like the EU and the US would exponentially increase export of textile and apparels from India, making us a global textile-manufacturing hub. This will facilitate Indian manufacturers to grab a higher revenue share of the global markets.

The textile industry has undergone a huge transformation with business-friendly policies. Several new policies have assisted in providing financial support to small-scale players in the industry. Sustainability and eco-friendly process would be a new normal in the textile industry and will continue to thrive in the coming years. We look forward to progressive policies and initiatives that will further strengthen the Indian textile industry and help it soar high on the global map.

The writer is past president, ASSOCHAM, & chairman, Welspun Group.

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