Textile, apparel sectors get fiscal bailout
The crisis-ridden domestic textiles and apparel sector got a much-needed fiscal bailout in the budget with the government providing a host of sops to trigger a revival in the labour-intensive sectors that create jobs. HT reports. The good lifeindia Updated: Mar 01, 2013 02:20 IST
The crisis-ridden domestic textiles and apparel sector got a much-needed fiscal bailout in the budget with the government providing a host of sops to trigger a revival in the labour-intensive sectors that create jobs.
Finance minister P Chidambaram on Thursday proposed Rs 2,400 crore to modernise the powerloom segment under the technology upgradation fund scheme (TUFS) while the outlay for setting up textile parks was enhanced to Rs 300 crore including Rs 50 crore for five new apparel parks.
"I propose to continue the TUFS for the textile sector in the 12th Plan with an investment target of Rs 151,000 crore," Chidambaram said. "The major focus would be on modernisation of the powerloom sector. I propose to provide Rs 2,400 crore in 2013-14 for the purpose."
An allocation of a further Rs 50 crore has also been made for an integrated "processing development scheme" which will be implemented in the 12th Plan period to address the environmental concerns of the textile industry. The total outlay of the scheme in the 12th Plan period is estimated to be about Rs 500 crore.
More importantly, the government has acceded to a long standing demand of the industry to do away with excise duties for the cotton and man-made fibre sectors.
"The readymade garment industry is in the throes of a crisis," Chidambaram said. "The industry needs a lifeline. The zero excise duty route for cotton and manmade sector at the yarn, fabric and garment stages is being accepted."
"This is a very positive sign and will definitely help the industry," said Sudhir Dhingra, CMD, Orient Craft. "Cotton prices have gone through the roof and increased by almost 25-30%. Duties were also high in the man-made fibre sector. By reducing duties, it will bring down prices and make us more competitive."