The slowdown-hit textile industry has much reason to cheer at Budget proposals made by Finance Minister P Chidambaram. With the introduction of “zero excise duty” for the readymade garments industry, costs would come down for the manufacturers as well as the consumers.
“The zero excise duty route will ease out the pressure on the margins of readymade garments manufacturers who are already struggling with slow demand growth,” Revati Kasture, Head, Care Research said. The easing of the 12 per cent compulsory excise duty has been welcomed by manufacturers.
“This is a fantastic move by the Finance Minister as it makes the retail market more competitive. With foreign brands coming in, if we can keep costs and maximum retail prices (MRPs) low then it would benefit not only the manufacturers but also the customers. It will be better for people as well because there will be more production, more brands in the market,” Agnimitra Paul, a Kolkata-based designer said.
The Budget also extended the Technology Upgradation Fund Scheme (TUFS) in the 12th Plan with an investment target of `1,51,000 crore. The government has allowed the setting up of textile parks under Scheme for Integrated Textile Parks (SITP), which would provide an impetus to the apparel industry.
Chidambaram has also proposed for financial assistance for handloom sector. “Proposal for allowing working capital and term loan at a concessional interest rate at 6 per cent will boost the investment in the handloom sector and will also benefit the large handloom weavers who are women and belong to the backward classes,” Kasture added.