FM gets 'earful' from the Textiles Ministry on Budget 2005
11 Feb '05
2 min read
As per the CII study, Indian textile industry is estimated to grow to $85 billion from the present $13 billion by the year 2010. Besides, the ending of the textile quotas have brightened the future of the domestic industry as India turns into a global textile and apparel outsourcing hub.
In the coming 2005-2006 budget, the textile industry hopes that Finance Minister P Chidambaram has all the goodies including tax sops, hike in subsidies and other benefits that can help the country withstand competition internationally.
Having received feedback from the Union Textiles Minister Shankersinh Vaghela, Textiles Secretary, R. M. Premkumar besides the opinion of the industry through his personal interaction, FM is expected delve deep in his “pockets” to give the textiles sector a strong chance to withstand global competition.
The process of simplifying taxation has been slow however the introduction of modified Value Added Tax 1994 was the first step in the right direction. The tax was replaced by CENVAT in 2003, and made optional in 2004.
Meanwhile, the textile ministry's wish list seeks allocation of Rs 1000 crores and a subsidy hike to 8 percent on loans for processing units. The most significant demand is a halving in excise duty on man made fibres to about 8 percent - on par with blended yarn.
The Joint Secretary, Textiles Atul Chaturvedi said, "Ministry has been saying for quite some time that duties should be at par for all fibres,there should be no discrimination. That's a long term objective and we are constantly pressing in that direction."
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