Indian textile and textile machinery budget impacts
The new Indian Budget offers new opportunities to the textile sectors.
The resulting impacts are as follows:
Technology Up-gradation Support:
Government’s flagship technology up-gradation scheme ATUFS receives an allocation is Rs. 2013 crores for 2017-18. This is a welcome move and provides impetus for investment in the textile and apparel sector.
Scheme for in situ up-gradation of plain power looms receives a budget of Rs. 68.31 crores which is a big budgetary boost form Rs. 48 crores last year. Under this scheme, power loom owners would get government’s support to upgrade weaving technology without replacing the whole loom.
Incentives to boost Competitiveness, Employment and Skilling:
Allocation under Remission of State Levies has been increased sizably to Rs. 1555 crores. This scheme includes the refund of State taxes to garments exporters to make the industry competitive and to boost employment in this Sector.
Fund allocation under Pradhan Mantri Paridhan Rojgar Protsahan Yojna (PMPRPY) is Rs 200 crores. This new scheme provides the Employee Pension Scheme contribution of 8.33% of the employers for all new employees enrolling in EPFO under PMRPY for the first three years of their employment. Again, this is to boost employment in textile sector by incentivising the employers and improving competitiveness.
Integrated Scheme for Skill Development for the textile sector receives Rs. 174 crores which is operational for last several years for under skilled factory workers.
Basic Custom Duty on Nylon mono filament yarn (for use in long line system for Tuna fishing only) reduced to 5 % (from earlier 7.5 %)
Textile and Apparel industry would benefit from Trade Infrastructure Export Scheme with an allocation of Rs 3.96 lakh crores.
Objective of doubling farmers’ income, skilling of youth, development of Infrastructure, in order to provide end to end solution by integrating rail, road, air and sea would greatly benefit the textile industry that is spread across the nation.
Higher income and spending by rural India to stimulate consumption of textiles and apparels. Currently, domestic demand for textile has been low post demonetization.
Reduction of corporate tax by 5 % to MSME (turnover below Rs 50 crores) will benefit textile and apparel industry as majority of the enterprises fall into this category. Further, additional allocation to the banks for NPA accounts, cashless transaction, labour reforms and relaxation of FDI norms by abolishing Foreign Investment Promotion Board (FIPB) would also benefit the industry.
Union Budget 2017 – 18 Quick Look
Plan Expenditure: Rs. 945078 crores
Non-Plan Expenditure: Rs. 1201657 crores
Total Expenditure: Rs. 2146735 crores
Fiscal Deficit: 3.2%
Revenue Deficit: 1.9%
Current Account Deficit – 0.1%
GDP for Budget Estimate for 2017-18 has been projected at Rs.16847455 crore assuming 11.75% growth over the Revised Estimates of 2016-17 (Rs. 15075429 crore).