Industries struggle with high raw material prices, expect relief measures in Union budget

With just a few more days for the Union budget, industries in Coimbatore and Tiruppur districts expect measures that will help the units tide over challenges they face because of the high raw material prices.

The textile and clothing sector has demanded removal of import duty on cotton, at least for extra long staple varieties and speciality cotton. It has also asked for duty free import of cotton during the last few months of the cotton season.

The pumpset manufacturing units have sought seed funding to industrial associations to make bulk purchase of raw materials for their members. President of Southern India Engineering Manufacturers Association KV Karthik said, “We cannot expect steps in the budget to control raw material prices. But, the government can support industrial associations that will benefit their members,” he said.

Further, the government should support research and development activities with incentives. This is a time when the industries want to develop new products. So, those who take up research and development jointly with recognised research centres, should be able to reflect 200% of the amount spent as their expense. This was available earlier but the amount was reduced later, he said.

According to the president of Coimbatore District Small Industries Association M.V. Ramesh Babu, the Income Tax for proprietor and partnership firms should be reduced to 20 % from the current level of 30 %. Companies and corporates pay only 20 % now. Micro, Small and Medium-scale Enterprises (MSMEs) realise just 5 % - 6 % profit. Lower IT slab will improve the competitiveness of these units, he said.

Further, the MSMEs are in dire need of more funds. The working capital is eroded because of high raw material prices. Hence, the working capital should be converted to long-term term loans and the government should make available funds for working capital.

The number of rate slabs in Goods and Services Tax (GST) should be reduced to three from six, he said.

J. James, president of Tamil Nadu Association of Cottage and Tiny Enterprises, said the government should allocate funds only for the micro sector. The schemes are all for the MSME sector and the beneficiaries are small and medium-scale units. The micro units require funds without any criteria to meet the present challenges, he said.

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Printable version | May 28, 2022 4:41:56 am |