Union Budget Gets ‘A’ Grade

Editor-NCM

The Union budget for 2013-14, presented by Finance Minister, P. Chidambaram, on 28th February 2013, has received an ‘A’ grade from the textile leaders thanks to his eye catching announcement of bringing down the Duty on Branded Garments to zero percent under the optional route from 3.5% earlier. Trade associations have termed this as a major initiative which will restore competiveness of Indian RMG exports.

The FM has extended the much popular Technology Upgradation Fund Scheme (TUFS) in the 12th Plan as per the wishes of the industry. The power loom sector has been allocated Rs. 2400 crores for 2013-14 with a major focus on it’s modernization. The TUFS has been quite successful in motivating the industry to undertake major modernisation and expansion programs in order to grab the global opportunities available. The availability of cheaper funds has helped the industry to considerably scale up their operations and become competitive in the global marketplace by acquiring latest machinery and technology available.

The Scheme of Integrated Textile Parks (SITPs) has been made more attractive by allowing to set up integrated apparel Parks with in-house manufacturing units. An additional grant of Rs. 10 crores has been made available now to each new park exclusively catering to the apparel sector. SITP scheme is directed at providing world-class infrastructure facilities to textile units so that they can meet international environmental and social standards.

In view of the increasing costs of environmental compliances, the government has announced “Integrated Processing Development Scheme” with an outlay of Rs. 500 crores. Some of the main features of this year’s budget concerning the textile sector are as under :

  1. The duty on raw silk has been increased from 5% to 15% as per the demands of the domestic sericulture industry.
  2. Rs. 96 crore has been provided to make working capital and term loans available at a concessional interest rate of 6% to nearly 1.5 lakh individual weavers and 1800 handloom cooperative societies for 2013-14.
  3. Handmade carpet and textile floor coverings of jute or coir have been exempted from excise duty regime.
  4. There will be zero duty on cotton at the fibre stage but spun yarn, at the fibre stage, will attract 12% duty.
  5. A major initiative for skill development will be undertaken through State Councils of Vocational Training on the lines of courses offered by various Apparel Training and Design Centers (ATDCs). Rs. 1000 Cr have been allocated for this.

The Union Budget announcements are merely pointers to the direction our policy makers want the industry to move forward. The overall competitive investment policies of various state governments are going to be more lucrative in coming years and will play a greater role in shaping the industrial growth of the country.

GD Jasuja

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