Interim budget 2024, although pragmatic, disappointing for the textile sector
The budget does not offer any major supportive measure to the industry, opines Gurudas Aras.
Finance Minister Nirmala Sitharaman on February 1 presented her sixth consecutive Budget with a speech lasting 56 minutes, her shortest-ever.
The textile and apparel industry was quite hopeful that the interim budget will announce tax incentives and better textile infrastructure so that manufacturing and exports can be strengthened. However there have been very few announcements concerning this important sector.
Overall increased allocation of around 27.60% for the Ministry of Textiles for the year 2024-25 when compared to the previous year is a welcome move. This allocation will be towards various schemes being operated by them including PM MITRA Park, NITTM, A-TUFS, ISDS, RoTDEP, RoSCTL, etc., apart from making allocation for Cotton Corporation of India to exercise MSP operation for cotton.
The textile and apparel industry, has welcomed the extension of the Rebate of State and Central Taxes and Levies (RoSCTL) scheme for two years. Continuation of the RoSCTL was essential for the long-term trade planning. The scheme has seen an increased allocation from Rs 8,404.66 crore last year to Rs 9,246 crore in the budget this year.
Measures to encourage green power, including bio-manufacturing, roof top solar and offshore wind to reduce the carbon footprint and the initiatives to prepare the country for meeting the sustainability goals will go a long way in making the industry turn to green.
The continuous efforts made in strengthening the logistics infrastructure facilities, aimed at reducing the transaction cost and thereby increasing the global competitiveness of the manufacturing sectors in the country is going to benefit the textile industry.
There was no major policy announcement in the interim budget for the textile industry apart from the above few. The industry needed immediate relief from the financial stress, especially in the spinning sector.
The budget does not offer any major supportive measure to the industry. It did not remove the import duty on cotton and changed the duty on fabric imports, which the industry was keenly looking forward to.
The man-made fibre industry was looking forward to rationalisation of the GST rates for the manmade fibre sector. But this was not touched upon.
I hope that the finance minister will prudently consider the above demands of the industry in the full-fledged budget which will be announced around July this year.
About the author:
Gurudas Aras is a Strategic Advisor (India) at ITA Group, Germany and Independent Director at Rossari Biotech Group companies.