The Textiles Ministry got most of what it had sought from the Finance Minister Pranab Mukherjee in its pre-budget memorandum; A Rs. 3384 crore financial package for handloom weavers, the setting up of two mega handloom clusters in Andhra Pradesh and Jharkhand, and three Weavers’ Service Centres at Jharkhand, Mizoram and Nagaland.

Presenting the budget in Parliament, Finance Minister Pranab Mukherjee announced Rs. 500 crore pilot scheme in the 12th Plan for promotion and application of geo-textiles in the North-East Region. He announced two more mega handloom clusters at Prakasam and Guntur districts in Andhra Pradesh and Godda district in Jharkhand. Four mega handloom clusters are in operation in the country. “I also propose to provide assistance in setting up of dormitories for women workers in the five mega clusters relating to handloom, power loom and leather sectors,” he said.

To address the need for local artisans and weavers, the government proposed setting up a powerloom mega cluster at Ichalkaranji in Maharashtra with a Budget allocation of Rs. 70 crore.  Excise duty on branded ready-made garments has been hiked from 10 percent to 12 percent. However, abatement of 55 percent from the retail sale price has been enhanced to 70 percent. As a result, the incidence of duty as a percentage of the retail sale price will come down from 4.5 percent to 3.6 percent. Basic customs duty of 5 percent has been proposed on imports of new automatic silk reeling and other specified textile machinery. Second-hand machinery would now attract basic duty of 7.5 percent.

The Finance Minister also exempted imports of automatic shuttle-less looms from payment of basic customs duty. He also announced a financial package of Rs. 3884 crore for waiver of loans of handloom waiver and their co-operative societies.

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