Rs. 2,400 crore allocated for modernisation of power loom sector

Finance Minister P. Chidambaram on Thursday gave a big thrust to the labour-intensive textiles sector by allocating Rs. 2,400 crore for modernisation of the power loom sector, Rs. 1,51,000 crore for Textile Upgradation Fund (TUF) and Rs. 50 crore for setting up of apparel parks.

The textiles sector has been reeling under continued international competition, falling demand and drop in exports.

The Minister allocated an additional sum of Rs. 96 crore in the next fiscal to the Ministry of Textiles for interest subsidy. He also proposed, for the first time, the setting up of apparel parks within the Integrated Textile Parks to house apparel manufacturing units.

For this purpose, he proposed an allocation of Rs. 50 crore to the Textiles Ministry to provide an additional grant of up to Rs. 10 crore to each park. Till now only textile parks were being set up.

A new scheme — Integrated Processing Development Scheme — with an outlay of Rs. 500 crore to address the environmental concerns of the textile industry was also proposed. “I propose to provide Rs. 50 crore in 2013-14 for the scheme,” he added.

Acknowledging that the ready-made garment industry was faced with a crisis and required a lifeline, the Minister decided to restore the zero excise duty route for cotton and man-made sector (spun yarn) at the yarn, fabric and garment stages. “In the case of cotton, there will be zero duty at the fibre stage and in the case of spun yarn, there will be a duty of 12 per cent at the fibre stage,” he said. The zero excise duty route would be in addition to the Cenvat route now available.

Carpets exempt from excise duty

He also proposed to totally exempt handmade carpets and textile floor coverings of coir or jute from excise duty. In further assistance to the handloom sector, the Minister proposed working capital and term loans at a concessional interest of 6 per cent which would benefit around 1,50,000 individual weavers and 1,800 primary cooperative societies. He also reduced basic customs duty on textile machinery and parts to 5 per cent from 7.5 per cent.

He said he proposed to continue the TUF Scheme for the textiles sector in the 12th Plan with an investment target of Rs. 1,51,000 crore. The TUFS was launched in 1999. In a bid to strengthen traditional industries such as khadi, village industries and coir, the Minister proposed leverage assistance from multilateral development banks to extend the Scheme of Fund for Regeneration of Traditional Industries (SFURTI) to 800 clusters during the 12th Plan. About 4 lakh artisans are expected to benefit from this, he added.

Apparel Export Promotion Council chairman A. Sakthivel welcomed the steps to address the concerns of ready-made garments industry and said these would help boost the growth of the sector. He said the creation of apparel parks within SITP (Scheme for Integrated Textile Parks) and allocation of Rs. 10 crore would go in a long way in increasing export of value-added textile chain.

“proposals”

The Confederation of Indian Textiles Industry welcomed the proposals terming them positive. In a statement here, CITI chairman S.V. Arumugam said there had been signs of recovery in the industry for the past few months and the budget would help this process further. Restoring the optional excise regime for branded garments and made-ups was the most positive factor in this budget, he added.