Textile ministry seeks further sops in the budget

In order to make the textile sector internationally competitive, the Union textile ministry has been lobbying hard with the PMO and the finance ministry to get various sops and incentives, including a 10 per cent capital subsidy for the processing sector.

"Getting the 10 per cent capital subsidy for the processing sector, which will be announced in the Budget was not an easy task. I had to fight with the prime minister and the finance minister to get sops and incentives for the sector," said Vaghela while addressing an interactive session on Indian textile industry with heads of leading banks and financial institutions at Gujarat Chamber of Commerce and Industries (GCCI) in Ahmedabad on Monday.

While the last budget provided special incentives to the sector by abolishing the Cenvat chain and removing the mandatory excise duty on pure cotton, wool and silk among others to boost textile exports in the post-quota regime, the forthcoming budget is expected to bring further rationalisation in the duty structure to provide a level playing field to the industry in the international arena.

"Sonia Gandhi, chairperson of the committee overlooking the implementation of the Common Minimum Programme (CMP), and prime minister Manmohan Singh have shown keen interest in the development of textile sector," said Vaghela.

The textile ministry is coordinating with other inter-ministerial groups to address the issues such as power cost, labour reforms and port infrastructure among others.

"The Indian textile industry is the second largest employer after agriculture in the country, creating over 12 million jobs, which contributes five per cent of the gross domestic product (GDP) and one-third of the total export earnings, where as it adds only eight per cent to the gross imports of the country. The ministry through policy decisions wants to boost the sector," said Vaghela.

The forthcoming budget is expected to rationalise the duty structure on man-made fibre, along with dereservation of 26 items under the small scale industries (SSI) sector, which would include the knitware segment among others.

There are also plans to establish 25 apparel parks and textile clusters and to further make the Technology Upgradation Fund (TUF) more flexible.