Budget 2017-18 Brings Cheers To Indian Textile & Apparel Industry

Trade & Policy

Budget 2017-18 Brings Cheers To Indian Textile & Apparel Industry

Budget Allocation for India’s Textile Ministry

	Rev. Budget 2016-17	Budget 2017-18
In Rs Crores or Rs 10 Million
Total Budget Allocation	6286.1	6226.5
Amended TUFS	2610	2013
Procurement of Cotton by CCI under Price Support Scheme	609.75	0.01
Handloom Development Programme	770	604
National Handloom Development Programme	150	146
Handloom Weaver Comprehensive Welfare Scheme	30	32
Yarn Supply Scheme	260	242
Handloom Mega Cluster Development	55	44
Handicraft Development Programme	345	289.7
Development of Woollen Textiles	23.01	32
Development of Silk Textiles	497.5	575
Development of Jute Industries	110.93	97.52
Powerloom Promotion Scheme	121.03	161.76
Integrated Scheme for Powerloom Sector Development	36.03	34.42
Scheme for In-situ Upgradation of Plain Powerlooms	48	68.31
Powerloom Mega Cluster	15	25
Textile Infrastructure Development	506	1860
Integrated Processing Development Scheme	28	30
Scheme for Integrated Textile Parks (SITP)	51	50
Remission of State Levies (ROSL)	400	1555
Pradhan Mantri Paridhan Rojgar Protsahan Yojna	...	200
R&D, Skilling and Capacity Building	351.38	272.99
Integrated Scheme for Skill Development	221.9	173.99
R and D Textiles	15	20
National Institute of Fashion Technology (NIFT)	62	60
North East Textiles Promotion Scheme	255.98	245
NER Textiles Promotion Scheme	220.98	220
Scheme for Usage of Geotextiles in North East	20	15
Scheme for Promoting Agro Textiles in North East	15	10

Note: Only fund allocation to major heads are shown

Total budget allocation to the Textile Ministry is at Rs. 6226.5 crores for the year 2017-18 against last year’s revised allocation of 6286.1 crores. Budgetary allocation for Powerloom, Silk and Wool textile sectors increased while handloom and handicraft sector were allocated sizable amount of the fund.

BUDGET IMPACTS:

1. 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.

2. 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 incentivizing 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.

3. Other Measures:

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 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.

4. 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)