The Interim Budget 2019-20 presented by Finance Minister Piyush Goyal recently will give major impetus to the textile and apparel consumption by increasing the purchasing power of middle class and farmers, Confederation of Indian Textile Industry (CITI) has said. The allocation for A-TUFS & ROSL—the flagship programmes of the Textile Ministry, has been reduced.
“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 MNREGA, etc.,” CITI Chairman Sanjay K Jain said.
Jain pointed out that the announcement of 2 per cent interest subvention for micro, small and medium enterprises (MSMEs) loans with a ticket size of Rs. 1 cr 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 per cent of the textiles and clothing industry which falls under MSMEs,” he said.
The Budget reduces the total outlay for the textile sector from the revised estimate of Rs. 6,943.26 cr to Rs. 5,831.48 cr. For A-TUFS, the budget allocation has been steeply decreased from Rs. 2,300 cr to Rs. 700 cr. “Last year only about 30 per cent of the Budget could be used due to low disbursements, however, to clear the carried forward obligations, a much higher allocation will be needed. The Budget 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,” Jain said.
The budgetary allocation for procurement of cotton by CCI under Price Support Scheme has been increased from Rs. 924 cr to RS. 2,018 cr. “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,” said Jain.
CITI has also welcomed that increase in allocation for Central Silk Board. “Though the textiles and clothing 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 programmes of the Textile Ministry – A-TUFS and ROSL,” Jain said.