Union Finance Minister of India, Arun Jaitely, has presented the much-awaited Union Budget today in the Parliament. Textile and apparel industry was hoping for some good announcements as this sector is claimed to be the worst-hit ones of the economy due to demonetization and the Budget has not disappointed them.
MSMEs having turn over below Rs. 50 Crore are likely to get benefits with cut in Corporate Income Tax by 5%. Previously, the tax rate was 30% which, in the recent budget, has been reduced to 25%. Textile associations in India have welcomed this move as they believe this decision is an encouragement for start-up’s to make investment in textile and apparel sector. The other benefits extended such as additional allocation to the banks for NPA accounts, cashless transaction, labour reform, relaxation of FDI norms by abolishing Foreign Investment Promotion Board (FIPB) would also benefit the textile and apparel industry.
Raja M Shanmugham, President of Tirupur Exporters’ Association (TEA), lauded the enhancement of allocation of fund to Mudra Bank from Rs. 1,36,000 crore to Rs. 2,44,000 crore which will encourage the new entrepreneurs in the region to investments in sectors such as knitwear.
Expressing his satisfaction over the announcements made, S C Ralhan, President of Federation of Indian Export Organizations (FIEO), said, “The investment of close to Rs. 4 lakh crore in the infrastructure encompassing road, railways, aviation would not only improve competitiveness of manufacturing and exports sector but would reduce the logistics cost of exports as well.”
Adding to that, M. Senthilkumar, Chairman of Southern India Mills’ Association (SIMA), welcomed the Union Budget…, “The objective of Doubling farmers’ income, Housing for one crore rural Indians, Skilling of youth by establishing 100 India International Skill Centres, Development of Infrastructure to provide end-to-end solution by integrating road, rail and ship would greatly benefit the textile industry spread across the nation.”
However, Ujwal Lahoti, Chairman of TEXPROCIL, has some mixed opinions on this Budget. He said, “Overall the Budget is positive, wide ranging and inclusive.” He, however, 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.