The Cotton Textiles Export Promotion Council (TEXPROCIL) today welcomed the Budget and appealed the Government to restore some of the incentives relating to interest subvention for merchant exporters and cotton yarn and MEIS benefit for cotton yarns.
The job creating package for textile sector found a worthy mention in the latest Economic Survey 2016-17. However, the made-ups sector which is included in the package still awaits the rates on ROSL scheme (Refund of State Levies), TEXPROCIL Chairman Ujwal Lahoti said here. He said he hoped the rates will be announced soon so that the sector could take advantage of this path breaking scheme.
Lahoti welcomed the 5 per cent reduction in corporate income tax for medium and small enterprises with Rs 50 crore turnover. This will benefit a large number of MSMEs in the textile sector also. He appreciated that the Government will continue to take measures to boost growth as well as employment generation. He however stated that export sector, which was languishing on account of low overseas demand and rising protectionism, had not found a mention in the budget. He appealed to the Government to restore some of the incentives relating to interest subvention for merchant exporters and cotton yarn and MEIS benefit for cotton yarns.
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He further stated that the Economic Survey 2016-17 in Chapter 7 has expressed concern on Indian exporters of garments/ textiles being disadvantaged in foreign markets on account of absence of Free Trade Agreements (FTAs). In fact the Economic Survey has estimated that an FTA with EU and UK can lead to almost 1 lakh additional jobs being created in the garment sector apart from an increase in exports of USD 2 billion. If fabrics and made-up industries are also included in this calculation, the exports can easily increase to USD 3.5 billion and an additional 1 million jobs can be created.
Considering the fact that the FTA with EU may take some time, Government should immediately consider giving an additional benefit of 3% MEIS for exports of made-ups to EU so that the adverse impact can be mitigated to some extent, till such time the FTA is signed.
M B Raghunath, President (Sales & Marketing) of Mafatlal Industries welcomed the budget and stated that the garment sector will have a boost on long term basis due to 35 per cent increase in government expenditures in rural infrastructure development; rural investment and rural economic improvement will boost demand for textiles and garments. SSI & Medium Scale textiles and garment manufacturing companies will be benefiting from this. Overall it is an encouraging budget with a long term vision, Raghunath said.