Interim Budget will boost Textile Consumption and Lead to Inclusive Growth: CITI
New Delhi, Friday, February 01, 2019: Mr. Sanjay Jain, Chairman, CITI welcomes the Interim Budget 2019-20 announced by the Hon’ble Finance Minister, Mr. Piyush Goyal. The Chairman stated that the budget is expected to give major impetus to the textile and apparel consumption by increasing the purchasing power of middle class and farmers.
Mr. Jain further stated that the present budget has focused on empowering the rural India and the middle-class of the economy. The new announcements have highlighted the commitments of the present government to improve the overall socio-economic condition of the country by touching upon the healthcare sector, infrastructure, ease of doing business, more beneficial schemes for low income strata of the society by enhancing their purchasing power, protecting them through pension scheme, minimum income through MGNREGA, etc.
CITI Chairman’s response to some of the key budget announcements are as follows:
A. MSME Sector
Chairman-CITI pointed out that the announcement of 2% interest subvention for Micro, Small and Medium Enterprises (MSMEs) loans with a ticket size of 1 crore has given a big thrust to MSMEs to boost employment and economic growth.
A few banks exiting PCA, relaxation for MSMEs on funding and interest rates will benefit 80% of the T&C industry which falls under MSMEs.
B. Textile and Apparel Sector
- The outlay for textile sector has reduced from revised estimate of Rs 6943.26 crores to 5831.48 crores.
- The fund allocation for various Textile Schemes is given in the table below:
|Remission of State Levies (ROSL)||2,164||3,664||1,000|
|Amended Technology Upgradation Fund Scheme (A-TUFS)||2,300||623||700|
|Central Silk Board||501||601||730|
|Procurement of Cotton by Cotton Corporation under Price Support Scheme||924||924||2,018|
- For A-TUFS, the budget allocation has been steeply decreased from Rs. 2300 crores to Rs. 700 crores. Last year only about 30% of the budget could be used due to low disbursements, however, to clear the carried forward obligations, a much higher allocation will be needed. Thebudget for ROSL has also been reduced significantly which is a cause of great worry to the industry as this could lead to working capital blockages and delay in ROSL receipts. Further the industry has been expecting upward revision in ROSL rates which would need more funds.
- The allocation for TUFS and ROSL is not sufficient to meet the requirements of the industry. Chairman hopes that the Government after general election, will enhance the allocation for ATUFS and ROSL in its final budget.
- Procurement of Cotton by CCI under Price Support Scheme has increased from Rs. 924 crores to Rs. 2018 crores. This move of the Government to doubling the income of the farmers is well appreciated by the industry. However, our request to the Government is to introduce Direct Subsidy System for the cotton farmers as it will ensure no direct impact on cotton prices
- Allocation for Central Silk Board has also been increased, which is a welcome step by the Government.
Government will provide assured income support of Rs 6,000 per year for small and marginal farmers with landholding below two hectares, through direct cash transfer under the Pradhan Mantri Kisan Samman Nidhi scheme.
D. Middle Class:
- Individuals having income of ₹6.5 lakh will not be required to pay any tax if they take full deduction of 80C on savings instruments like PPF etc.
- Standard deduction raised from Rs. 40,000 to Rs. 50,000 benefiting the salaried class.
- TDS threshold on interest earned on bank/post office deposits is being raised from Rs. 10,000 to Rs. 40,000. This will benefit small depositors and nonworking spouses.
- This will result in increase in the purchasing power of the middle class.
- Pension scheme for the workers in unorganised sector with monthly income up to Rs.15,000.
- Assured monthly pension of Rs. 3,000 on attaining the 60 years age.
- Rs. 60,000 crores allocated for MGNREGA
- Allocation for Skill Development and Livelihood reduced from Rs 604 crores to Rs. 523 crores.
Hence can conclude that though the T & C industry is expected to be a major gainer due to the extra funds which flow into the hands of the section of the society where incremental marginal expenditure on clothing is very high, the industry hopes for greater allocation of funds for the two flagship programs of the Textile Ministry – ATUFS & ROSL.