Technology Upgradation Fund Scheme has been extended to the XII Five-Year Plan
Readymade garments are likely to cost less as the Union Budget has restored the optional excise duty regime to the garment and made-up sectors.
Readymade garments attract 12 per cent excise duty now. The budget has proposed zero excise duty on branded readymade garments and made-ups.
Further, the budget proposes an allocation of Rs. 50 crore for apparel parks.
“It is a big boost to the entire apparel and fabric segment,” says Govind Shrikhande, Managing Director of Shoppers Stop.
The excise duty had impacted growth of the garment retail sector.
Though the details are awaited, it will have a positive impact, he adds.
The Technology Upgradation Fund Scheme has been extended to the XII Five Year Plan and expects to attract Rs. 1.51 lakh crore investment.
The allocation for this year for the scheme is Rs. 2,400 crore.
The scheme, which was launched in 1999, started gaining momentum in the XI Five Year Plan period and the growth will be sustained now.
Reduction of customs duty on textile machinery and parts to five per cent from the existing 7.5 per cent and extension of the TUFS and the Scheme for Integrated Textile Parks will help attract the envisaged investment, says S.V. Arumugam, chairman of the Confederation of Indian Textile Industry.
Allocation of Rs. 96 crore for the handloom sector will provide working capital and term loan at lower interest rate to the weavers.
The budget also proposes an Integrated Processing Development Scheme. Textile processing is one of the weakest links in the textile value addition scheme and a focused scheme for the segment will attract investments and enhance value addition, says S. Dinakaran, chairman of the Southern India Mills’ Association. The scheme is expected to expedite infrastructure development in processing parks and give benefits to capital investments in the parks.
Chairman of Cotton Textiles Export Promotion Council Manikam Ramaswami has said in a release that the zero excise duty at the yarn, fabric and garment stage will stimulate demand for garments and home textiles.
This augurs well for the entire textile sector. The budget proposals are expected to boost capacity enhancement and modernisation of the sector.
President of the South India Spinners’ Association K. Thirunavukkarasu says the spinning mills will benefit from the restoration of optional duty route for cotton and manmade garments.