by Apparel Resources News-Desk
01-February-2019 | 3 mins read
Finance minister Piyush Goyal’s much-awaited Union Budget 2019 was a reason for the tax payers to rejoice big time, but the people oriented budget did not bring much cheer to the textile and garment industry. The outlay for textile sector has reduced from revised estimate of Rs 6943.26 crore to Rs 5831.48 crore. Out of this, the allocation to ATUFS and ROSL are Rs.700 Crore and Rs.1,000 Crore respectively. The ROSL allocation of Rs.1,000 crore is lower since the apparel exports per annum is hovering around Rs.1,10,000 crore and with the existing ROSL rate at 1.7 per cent, the amount required would be Rs.1,700 crore. Allocation for skill development and livelihood reduced from Rs 604 crores to Rs. 523 crores.
There are some positives steps too in the budget. Industry association has welcomed the budget and expected that the Government will increase allocation in future.
The RoSL budget allocation has been reduced to Rs.1,000 crore from last year’s Rs.2,164 crore, as against the revised estimate of Rs.3,664 crore for the same year. The A-TUFS allocation has also been reduced to Rs.700 crore from the previous year’s budget allocation of Rs.2,300 crore. Substantial reduction in the budget allocation for RoSL and Technology Upgradation Fund (A-TUFS) benefits would have serious impact on the textile industry.
On the other side, the announcement of 2 per cent interest subvention for MSMEs loans with a ticket size of 1 crore has given a big thrust to MSMEs to boost employment and economic growth. There is an increase in interest equalization scheme allocation from Rs.2,600 crore to Rs.3,000 crore. Procurement of cotton by CCI under price support scheme has increased from Rs. 924 crore to Rs. 2018 crore. Allocation for Central Silk Board has also been increased from Rs. 501 crore to Rs. 730 crore. Announcement of pension scheme for the workers in the unorganized sector enabling such workers to receive Rs.3000 per month as pension after attaining the age of 60 years has also affected the textile industry which is predominantly an unorganized sector. The scheme is expected to largely benefit the weavers of handlooms and powerlooms and also the workers of several other small, micro units from other segments of the industry. Expert feels that the decision of doubling the income tax exemption limit from Rs.2.5 lakhs per annum to Rs.5 lakhs per annum apart from enhancing the standard deduction limit from Rs.40,000 to Rs.50,000 would benefit several lakhs of middle-class employees of the textile industry.
“Backlog in the A-TUFS would be over Rs.2000 crores as over 3000 projects that got implemented are yet to receive the subsidy due to the complicated guidelines of A-TUFS. The Government had earlier allocated Rs.17,822 crores including Rs.5151 crores for A-TUFS for the 13th five-year plan in order to clear the long pending committed liability under M-TUFS, R-TUFS and also RR-TUFS. We hoped that the Government would allocate necessary funds soon as the procedural issues are sorted out,” said P.Nataraj, Chairman, The Southern India Mills’ Association (SIMA)
“We are happy as far as increase in interest equalization scheme is concerned. It would meet the recent increase in interest equalization for MSMEs from 3 per cent to 5 per cent. I feel that the other allocations may be revised upwards in the regular union budget 2019-20,” said Raja M Shanmugham, President, Tirupur Exporters Association.
“PM Shramyogi Maandhan Yojana providing assured pension of Rs. 3000 to the workers in unorganised sector is a landmark step towards strengthening financial security of our workforce. Scheme will benefit over 80 lakh Handloom/Handicraft workers in textiles sector” Smriti Irani, Union Textiles Minister, India
“Budget is expected to give major impetus to the textile and apparel consumption by increasing the purchasing power of middle class and farmers,” shared Sanjay K Jain, Chairman, Confederation of Indian Textile Industry (CITI) and MD, TT Limited