Indian Textile & Apparel Industry To Benefit From Enhanced Budget Allocation

Trade & Policy

Indian Textile & Apparel Industry To Benefit From Enhanced Budget Allocation

Budget: Ministry Of Textiles (In Rs. Crores)	2017-18		2018-19
Total Budget Allocation	6251	7148
Amended TUFS	1956	2300
Procurement of Cotton by CCI under MSP	302.7	1956
National Handloom Development Programme	470	396.1
1. Handloom Weaver Comprehensive Welfare Scheme	25	19
2. Yarn Supply Scheme	200	150
3. Handloom Mega Cluster Development	32.28	35
4. Other Handloom Development Programmes	213	192
Handicraft Development Programme	229.8	198.4
Development of Woollen Textiles	25	11.45
Development of Silk Textiles	600	510
Development of Jute Industries	135.9	28.14
Powerloom Promotion Scheme	115.5	112.2
1. Integrated Scheme for Powerloom Sector	29.5	0
2. Scheme for In-situ Upgradation of Plain Powerlooms	68	0
3. Powerloom Mega Cluster	1	25
4. PowerTex India	0	87.15
Textile Infrastructure Development	1931	2223
1. Integrated Processing Development Scheme	5	3.8
2. Scheme for Integrated Textile Parks (SITP)	40	30
3. Remission of State Levies (ROSL)	1855	2164
4. Pradhan Mantri Paridhan Rojgar Protsahan Yojna	0	10
5. Other Schemes	31.44	15.16
R&D, Skilling and Capacity Building	153.2	252.1
1. Integrated Scheme for Skill Development	100	200
2. R and D Textiles	10	11
3. National Institute of Fashion Technology (NIFT)	30	30
4. Other Schemes	13.2	11.09
North East Textiles Promotion Scheme	245	112.6
1. NER Textiles Promotion Scheme	220	90
2. Scheme for Usage of Geotextiles in North East	15	15
3. Scheme for Promoting Agro Textiles in North East	10	7.6

Establishment Expenditure of the Centre	73.94	78.85

Note: Only fund allocation to major heads are shown

Total budget allocation to the Textile Ministry has been increased to Rs. 7148 crores for 2018-19 from Rs. 6251 crores (1 Crore = 10 Million) .

BUDGET HIGHLIGHTS FOR TEXTILE INDUSTRY

1. Technology Up-gradation Support Enhanced

Government’s flagship technology up-gradation scheme ATUFS receives a higher allocation at Rs. 2300 crores for the upcoming year as against Rs. 1956 crores in 2017-18. This is a welcome move and would provide boost to capacity expansion in the textile and apparel sector.

However, no budgetary allocation is done for Scheme for in situ up-gradation of plain power looms in the current budget which received Rs. 68.31 crores in last year’s budget.

2. PowerTex India Scheme would be Driving Force

Launched in last year, PowerTex India Scheme to drive the growth of powerloom sector as budgetary allocation has been increased to Rs. 87.15 crores for FY 2018-19. This scheme seems to be helpful for the decentralised powerloom industry across various clusters. Powerloom Mega Cluster development would also be continued in the coming year with a budget allocation of Rs 25 crores.

3. Incentives to Stimulate Competitiveness, Employment and Skilling

Allocation under Remission of State Levies (ROSL) has been increased sizably to Rs. 2163.85 crores from Rs 1855 crores in FY 2017-18. This scheme includes the refund of State Taxes to apparel exporters to make the industry competitive. Industry has been regularly asking to boost the ROSL incentive from current 1.5% as they believe the tax paid are not recovered fully.

Government continued the Pradhan Mantri Paridhan Rojgar Protsahan Yojna (PMPRPY) that contributes 12% towards EPF of new employees and its applicability has been extended for next three years. This will provide an additional momentum to hiring of workers by the apparel industry.

Integrated Scheme for Skill Development for the textile sector receives a budget allocation of Rs. 200 crores which is operational for last several years.

4. Cotton Fiber Might Get Dearer

Govt’s objective of doubling farmers’ income by increasing Minimum Support Price (MSP) of crops indicates towards higher support price for cotton in the 2018-19 season. This might go against the cotton textile industry.

5. Other measures that matters textile industry

Corporate tax rate reduced to 25% for the companies having turnover upto Rs 250 crores. The increased turn over limit from Rs.50 crore to Rs.250 crore would benefit majority of the textile and apparel sector.

Basic Custom Duty on Silk Fabric increased from 10% to 20% to protect domestic industry.

Govt. to abolish the Education Cess and Secondary and Higher Education Cess on imported goods, and replace it with Social Welfare Surcharge, at the rate of 10% of the aggregate duties of Customs.

Focus on development of Infrastructure to bring benefits the textile industry that is spread across the nation.

6. Quick Look Union Budget 2018 - 19

Total Expenditure: Rs. 2442213 crores

Fiscal Deficit: 3.3% (or Rs. 624276 crores)

Revenue Deficit: 2.2% (or Rs. 416034 crores)

GDP Growth Estimated: 7.4% in the coming year