Textile industry pins hopes on Budget

Hyderabad: As the day for presenting the Union Budget for 2021-22 is nearing, the appeals from different sections of the society are pouring in. The expectations are high from traders, especially in textile, readymade garments and fashion industry. They have been facing many challenges since March 2020, initially because of the Covid-19 lockdown and later on due to lack of demand, job cuts, capital issues, among others.

Srikanth, a Hyderabad-based Classic Polo outlet owner, says: "The pandemic has impacted our business, which is down by 40 per cent. Our expenditure, however, remained the same. Our capital is drying out and we are not able to invest in new products."

He feels that govt should announce some measures for textile and garment industry. He says, "Cotton prices have gone up by 18 per cent in international market recently, which is an extra burden for manufacturers. Hence, small and medium manufacturers now need financial support from government without the interest burden."

"Textile industry is one of the largest employment providers in India, and business community is a major tax contributor, so it's imperative that govt should support us during these troubled times," he opines.

According to Telangana State Federation of Chambers of Commerce and Trade (TSFCCT) president Ammanabolu Prakash, "Out of 29 major trade segments, only a few have done their regular business during the Covid lockdown. Such businesses include medical shops, grocery, chemical traders, and departmental stores. The badly affected trade segments are: hospitality, travel, and catering. It is a fact that about 83 per cent of traders have done less business than what they have done before Covid." Prakash expects the government to help the traders especially in textile and garment businesses, who have been facing many challenges ranging from lack of demand to capital woes. He says, "The Union Budget should announce three years' income tax rebate for traders who are affected by Covid-19 pandemic. Government should provide special financial package to small and medium traders and give bank loans at 6 per cent for big and corporate traders." "The way the loans are being offered to MSMEs under SIDBI now," he adds.

Prakash further says, "Textile industry has been demanding abolition of duty levied on (Purified Terephthalic Acid (PTA) to remain globally competitive, it enhances global competition, consequently, helps in augmenting our exports".

He says, "The current GST rate on retail trade is 5 per cent. After agriculture, textiles industry is the second large employment provider in India, therefore we seek govt to charge 2 per cent GST on textile retailers, as it is essential commodity." "GST rate should be uniform on below 1,000 and above 1,000, but currently there is distinction of above and below 1,000 for GST rates which should be removed," he opines.

The Clothing Manufacturers Association of India (CMAI), a representative of domestic textile industry with both manufacturers and retailers as its members, has recommended government to take the following measures in the forthcoming Budget:

• Domestic manufacturers should be provided with working capital at least for one year and the interest rates must be at the same rate given to exporters.

• The Government is planning to bring an outstanding PLI Scheme, which for the Textile sector will be converted to a FPLI Scheme. However one of the qualifying criteria for this scheme is a current base turnover of Rs 100 crore. Not many manufacturers in garment industry will qualify for this criterion and therefore it should be reduced to Rs 50 crore, for this scheme to be effective.