Spelling out its wish list for the upcoming union budget, the knitwear industry in Ludhiana is seeking continuation of the Technology Upgra-dation Fund Scheme (TUFS), even as it wants revocation of excise duty on branded garments.
The Ludhiana knitwear cluster, which comprises over tens of thousands of units, is estimated to be contributing to almost a fourth of the state economy's total woollen/acrylic output. Its product range includes gents, ladies and children garments including T-shirts, sweat shirts, pullovers, jackets and grey fabric clothes of high fashion quotient.
The Ludhiana Knitwear club, which claims to enjoy the support of over 1,000 knitwear industries in that city, says the imposition of 10 per cent excise duty on readymade garments in the Union Budget 2011 added to the burden of the manufacturer. With prices of branded garments moving up, apparel manufacturers this year had a tough time selling the garments, club president Vinod K Thapar said. “t was evident from the early onset of season sale starting from January.”
The Clothing Manufacturing Association of India maintained that there was a slump in the production this time. Its president Rahul Mehta said there was a de-growth in volumes by 5 per cent, even as an increase in the prices of branded garments had resulted in a value growth for the apparel sector ranging from 17 to 20 per cent. Thapar noted that the additional excise duty imposed on apparel apart from burdening the buyer and manufacturer was also posing a threat in the wake of allowing import of garments from Bangladesh under a free trade agreement last year. The knitwear industry is also seeking revocation of excise duty on branded garments in the upcoming budget.
The knitwear industry is also demanding a renewal of TUFS, which is due to expire next month. The textile industry in Ludhiana is facing lot of problems due to labour shortage, mainly due to the Mahatma Gandhi National Rural Employment Guarantee Act. After the implementation of this job guarantee scheme, industrialists in cities like Ludhiana are facing an acute shortage of labour. “The available labour is too costly too,” Thapar noted.
The knitwear industry is also seeking the implementation of the goods service tax (GST). The government's defering the implementation of the GST has been a blow for the industry, Thapar said. “It needs to be introduced in the forthcoming budget — after the abolishment of the CST," he added.