Source: ETRetail.com, Feb 05, 2017
NEW DELHI: In line with Prime Minister Narendra Modi’s vision to increase output and jobs in the textile sector, the Budget has given a major boost to textile infrastructure by increasing the allocation for building textile parks, incubation facilities, processing and development centres by almost three times.
The provision for textile infrastructure has been increased to Rs 1,860 crore in 2017-18 from Rs 506 crore in FY17.
These increased funds will also be used for the Pradhan Mantri Rojgar Protsahan Yojana to promote employment in the sector.
Infrastructure is the only segment of the total textile industry which has got higher funds. Allocation for the ministry is similar to last year.
“Though there are no new schemes or programmes specifically for the textiles or garment industry, the Budget has several provisions that will help the sector to grow faster,” said Rahul Mehta, President, Clothing Manufacturers’ Association of India.
However, the government has cut down the support to the Amended Technology Upgradation Fund Scheme (ATUFS) which is used to promote technical textiles and generate employment in the apparel and garment sectors. The budgetary allocation is down from Rs 2,610 crore in FY17 to Rs 2,013 crore now.
“The allocation for the textile industry used to go for TUFS but the industry felt that besides modernization, more is needed in infrastructure such as plug and play facilities. So, the allocation is in the right direction as will improve the investment climate in textile parks,” said an industry expert.
The largest chunk of the spend, Rs 1600 crore is expected from the remission of state taxes which will make garment exports competitive.
By creating more incubation centres, the government has encouraged domestic textile manufacturing which has lost market share to Bangladesh and Vietnam.
Higher infra spend will help create the logistics required for the Rs 6,006 crore package for apparels announced last year.