Budget spin-offs Lift Hopes

Budget measures like corporate tax cut for MSMEs, plan to set up 100 international skill centres, and support to cluster approach for contract farming have brought cheer to the textile industry. An ITJ Report on the pros and cons of the Budget 2017-18.

Never had any Budget in the past brought succour directly to the textile industry: its perpetual grouse! The Budget 2017 is no exception. But this time around, the Budget spin-offs -- including measures like corporate tax for MSMEs below Rs 50 crore turnover have brought bucketful of reliefs and hopes to the textile industry.

“Over the years, budget allocation for the Ministry of Textiles has increased by a few hundred crores, but this year the allocation is significant with a total budget of Rs 6,226.5 crore compared to Rs 4,595 crore last year (35 per cent increase). This shows the positive attitude government has towards the textile sector. As a part of larger initiative of ‘Make in India’, much needed impetus is being provided by the central government,” says Amit Gugnani, SVP, Fashion – Textile & Apparel at Technopak.

Amidst global slowdown, India is expected to be among fastest growing major economies in 2017 and is expected to grow at 7.6 per cent. The Government has fiscal deficit target of 3.2 per cent from 3.5 per cent of GDP last year.

Welcoming the Budget as a growth-oriented Budget, M Senthilkumar, Chairman of the Southern Indian Mills Association (SIMA), said that the main demand of the Association of continuing the existing tax structure including the service tax and optional Cenvat route extended for textile industry till the GST is implemented has been considered in the Budget.

“The other benefits extended such as 5 per cent reduction in the tax for MSME industrial units, additional allocation to the banks for NPA accounts, cashless transaction, labour reform, relaxation of FDI norms by abolishing Foreign Investment Promotion Board (FIPB) would also benefit the textile industry. The Cluster Approach for contract farming would greatly benefit the predominantly cotton-based textile industry,” opined the SIMA Chief.