India's fiscal budget increases the distribution of textile and garment industry

The Indian Textile Association welcomes the increase in the distribution of the textile and apparel industry in this year's budget, saying it will help companies in many ways, including the tax rebate for the National Tax (RoSL). “For those companies with annual turnover of Rs 2,500 crore, the decline in corporate tax rates will benefit most textile companies.” They are somewhat skeptical.

Other associations, including South India Mills Association (SIMA), Coimbatore Indian Textile Industry Federation (ITF), Confederation of Indian Textile Industry (CITI), Tiruppur exporters Association (TEA), cotton textile products Export Promotion Council (TEXPROCIL) The Indian Garment Manufacturers Association (CMAI) also welcomed the increased funding for infrastructure development and concerns about agriculture and was pleased with the incentives for micro and small and medium-sized enterprises (MSMEs).

According to CITI President Sanjay Jain, the national livelihood plan of Rs 57.5 billion will benefit the rural textile industry. The budget allocation for the textile sector has increased to Rs. 71.48 billion, including Rs 23 billion for the Textile Technology's Renewal Technology and Upgrade Fund Program (ATUFS). Last year, the budget for the textile and apparel industry was 62.51 billion rupees.

ATUFS was introduced in 2015, specifically for job creation and exports, the promotion of textile technology upgrades, as well as update existing looms and encouraged to improve the quality of processing industry.

SanjayJain believes that a large part of the increase in distribution has been transferred to the Indian National Cotton Company (CCI) for minimum support price (MSP) operations, so it will not help the textile and apparel industry.

Ahmedabad Global Textiles (India) Co., Ltd. CEO Bhavin Parikh said that no specific measures were mentioned in the budget to increase India’s export competitiveness in textiles or to benefit The policy of revitalizing the textile special economic zone.

SIMA Chairman Pnataraj said that for companies with an annual turnover of Rs. 2.5 billion, the corporate tax rate will be reduced from 30% to 25%, so more than 80% of textile companies will benefit and help them reinvest to create more jobs and Add value-added products.

However, Nataraj and TEA Chairman Raja MShanmugham believe that RoSL's quota last year was 21.64 billion rupees, while last year's exports of 18.55 billion rupees were still insufficient for clothing and garments, due to a large backlog of orders in 2017.

Shanmugham said that the clothing exporter's RoSL plan will take effect from September 20, 2016. As of March 31 this year, the actual demand for the clothing sector alone is between Rs 50 billion. TEXPROCIL Chairman Ujwal Lahoti hopes to increase funding to cover the fabric industry under the RoSL program.

RSJalan, managing director of GHCL Ltd., said that the infrastructure development grant increased by 20%, indicating that the government is pushing to revitalize the economy. CMAI President Rahul Mehta said infrastructure bottlenecks have hampered apparel manufacturing, which involves the transportation of important domestic raw materials and finished products.

Many industry associations have pointed out that in the first three years, women employees' contribution to the employee's provident fund (EPF) has been reduced to 8%. Therefore, because of the wide-ranging employment of women in the sector, workers in the clothing sector will be one of the main beneficiaries of this regulation.

CITI main Xi Guen said: "Although silk fabric basic tariff (BCD) rose from 10% to 20%, but the industry eager to increase BCD on yarn and fabric, so disappointed."

The MSP of all crops is 1.5 times the cost of production, which will benefit farmers, but will lead to high inflation in the consumer and downstream sectors and make the industry uncompetitive internationally.

CITI called on the government to shift from MSP to direct subsidy system so that farmers' interests protection measures will not affect textile consumption and industrial value-added.