India’s Textile Industry & Union Budget
India’s textile and clothing industry contributes 4% per cent to Gross Domestic Product, 14 per cent in industrial production and 12 per cent in export earnings. It is the second largest industry providing employment after agriculture.
Union Budget Proposals:
- Central Pan outlay enhanced to Rs 4500 crore from Rs 4092 crore.
- Out of this Technology Upgradation Fund Scheme (TUFS) provided Rs 3140 cr
- Scheme for Integrated Textile Park SITP provided of Rs 397 crore
- Rs 340 cr for Handloom
- Rs 220 cr for Handicrafts Schemes.
- Setting up of 5 Mega clusters:
• West Bengal: one Handloom mega cluster
• Tamilnadu : one handloom mega cluster
• Rajasthan : one Power loom Mega cluster.
• J & K : one Carpets Mega cluster
• Mirzapur UP : one carpet Mega Cluster
- These mega clusters, when operationalised, will generate employment for 50,000 people and attract an investment of approx. Rs.1,400 crore.
Note: Two handloom mega clusters at Varanasi and Sibsagar and two mega powerloom clusters at Erode and Bhiwandi were approved in the last Budget that are under successful implementation
Taxes Benefits to Exporters:
- Adjustment Assistance Scheme to provide enhanced Export Credit and Guarantee Corporation cover at 95% – extended up to March 2010
- Allocation for Market Development Assistance Scheme enhanced toRs. 124 crore.
- Interest subvention of 2% on pre-shipment credit extended beyond current deadline of 30th September, 2009 to March 31, 2010
- Sun-set clauses for deduction in respect of export profits under sections 10A and 10B of Income Tax Act extended by one more year
- Fringe Benefit Tax to be abolished
- Custom Duty : Custom Duty on Cotton waste and wool waste to be reduced from 15% to 10%
- Excise Duty : Excise Duty on man made fibre and yarn to be increased from 4% to 8%. An optional excise duty exemption to be provided to tops of manmade fibre manufactured from duty paid tow at part with tops manufactured from duty paid staple fibre.