The textile sector nearly came to a standstill in the first few weeks after demonetization. As an after effect, many small garment units were unable to pay wages to workers and production. However, with the situation improving steadily and the Union Budget coming up, the industry is optimistic about the year ahead. What Arun Jaitley announces on February 1 will determine whether the industry’s optimism is warranted.
A Sakthivel, Chairman, Federation of Indian Export Organisations and textile industry veteran says, the industry does not expect too many sops from the Budget. After the big Rs 6,000 crores special package announced last June, the industry does not expect major sops. The two key demand from the industry, submitted to the government, concerns the Goods and Services Tax (GST).
Analysts say the industry is lobbying hard for export tax exempting. Another issue is that a lot of products are transported right through production. Something goes for printing outside of the primary factory and then comes back. The government should exempt the industry from the tax as well, Sakthivel felt.
Others however, have more specific suggestions on what the budget’s thrust should be. V D Zope, Chairman of The Textile Association (India), stressed that more focus needs to be put on the garments segment, to boost exports. The industry should also push for more polyester cotton consumption, he believed. But more important is what Jaitley is expected to give to exporters. Vope says, the focus should be on exports and more incentives needs to be given.
