The highly labour intensive textile industry which can shoulder major responsibility for inclusive growth of the country has been overlooked in the Union Budget 2008-09, reacted Dr K V Srnivasan, Chairman, SIMA.
In a Press Release issued, he said that while the industry was hoping some relief measures in order to overcome the recession faced by the industry in the aftermath of sudden appreciation of Rupee against US Dollar (around 15%), high bank interests (5%), high cotton prices (20%), etc, no relief measures have been announced in the Budget.
Dr Srinivasan mentioned that the industry was demanding for reduction in import duty on cotton from 10% to 5%, exemption of cotton from special CVD, withdrawal of 1% drawback extended for cotton export, refund of local levies, reduction of customs duty and excise duty on manmade staple fibre from 7.5% to 5%, withdrawal of customs duty on furnace oil imports for captive consumption by textile industry and reduction in mandatory excise duty, withdrawal of customs duty on textile machinery except spindles, etc, in order to compete with the countries like China, Pakistan, Bangladesh, Sri Lanka and Taiwan, which have competitive edge over India.
He further stated that demand of the industry in respect of one year moratorium period for repayment of loans and interest to prevent many textile units becoming NPA, has also not been considered in the budget announcement. He pointed out that the government has alsofailed to compensate the run away appreciation of Rupee against US Dollar.
The earmarking of Rs.450 crores for Scheme for Integrated Textile Park (SITP) and Rs.1090 crores for Technology Upgradation Fund Scheme (TUF) was only a routine announcement, as the TUF and SITP had already been extended for the entire 11th Five Year Plan period, remarked Dr K V Srinivasan.
He further pointed out that the allocation of fund for TUF in the budget, was sufficient to meet only the backlog and would not meet the future demand.
He regretted the efforts put in by the industry as well as the government during the last couple of years to make the industry globally competitive, achieve the targeted growth rate investments and creation of new employment for over 15 million people, have gone in vein and the budget has totally ignored the textile industry.
On the contrary, the Budget has withdrawn shuttleless looms from the exemption list of Central Excise / CVD and has levied 8% duty.
Dr Srinivasan has mentioned that this would totally discourage any investment in the weaving sector, which is a weakest link in the textile value chain and would seriously affect the development of powerloom sector and various textile parks in the country.
SIMA chairman further said that the Union Budget has also not considered the recommendations made by the different Work Groups of Texsummit 2007, a national conclave organized by Ministry of Textiles, wherein the Hon’ble Prime Minister had participated and promised to take necessary steps to sustain the competitiveness of the Indian textile industry in the globalized arena.
However, SIMA chief welcomed the announcement of textile clusters for development of powerlooms in Bhiwandi and Erode, which is the only welcoming feature in the Union Budget for the textile industry.
