Ministry in sop mode for textiles post Jan 1

With the export quota set to go on January 1, the textiles ministry is working on a package of fiscal incentives for the sector in the next Budget to enable the sector face competition from countries like China.

The ministry has sought assistance from the recently constituted National Manufacturing Competitiveness Council (NMCC) to finalise its proposals.

"We intend to focus on providing fiscal incentives to the sector in the next year's Budget. We (the ministry) intend to work closely with the NMCC in finalising our proposals for the Budget. The NMCC will be the nodal point between the textiles ministry and the finance ministry," Textiles Secretary Wajahat Habibullah told Business Standard.

Habibullah said the removal of the central value-added tax (Cenvat) this year had created some anomalies for the man-made sector, which would be taken up in the Budget.

In addition to this, the 45 per cent deduction across the board in the duty-neutralisation scheme called the Duty Entitlement passbook Scheme (DEPB), which had hit the man-made sector, would also be taken up, he said.

The Budget would also focus on new sectors like bamboo, which had huge potential for exports. "We are finalising a Rs 2,500 crore bamboo mission, which would help generate an employment of 86 lakhs over the next 10 years. We have alrady sent the proposal to the Planning Commission for its approval," he said.

Since several textile units are sick, the ministry is also working on revamping the Textile Debt Restructuring Fund.

"We have already discussed with banks like IDBI on how the fund could be used along with other schemes like the Technology Upgradation Fund (TUFS). In order to make the fund a more attractive proposition we are considering the option of setting up a revolving fund rather than asking banks to reimburse finance. The initial amount could be Rs 45 lakh," Habibullah said.

Dress rehearsel

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• Budget to focus on fiscal incentives
• Debt restructuring fund to be revamped
• Rs 2,500 crore bamboo mission to be announced