Home Economy Government mulls fiscal relief for textile industry

Government mulls fiscal relief for textile industry


New Delhi : The government will provide fiscal reliefs including service tax exemption to the slowdown-hit textile sector, Minister for Textiles Dayanidhi Maran said here Friday.

“As part of a short-term strategy (for the textile industry), the government will strive to rationalise fiscal structure, exempt service tax, reduce interest rates on pre and post-shipment credit and facilitate faster clearance of arrears,” Maran said here while releasing a report on the effects of the slowdown on the textile sector.

He assured the industry that the government would take adequate steps on short, medium and long-term basis to provide relief to the sector.

“The government will impart momentum to the implementation of the technology upgradation fund scheme (TUFS), scheme for integrated textiles parks (SITP) and the technology mission on cotton (TMC) in the 11th Five-Year Plan period,” Maran said.

In the long run, “there is a need for improvement in the infrastructure, labour law reforms, and creation of a new business orientation by the industry in line with the global trends”, he added.

The minister also said in the coming year the government would take steps to create one crore jobs in the sector and would build world-class state-of-the-art manufacturing facilities.

Maran has also promised to initiate consultation process to form a national fibre policy. For this, he urged the industry to come forward and give its inputs.

Talking about India’s overseas markets, which are now mainly the US and Europe, he said: “There is a need to diversify T&C (textiles and clothing) exports to new markets like Gulf Cooperation Council (GCC), Africa, Latin America, Russia and Oceania.”

Six gulf states – Bahrain, Kuwait, Oman, Saudi Arabia, Qatar and the United Arab Emirates – make up the GCC.

The report, “Impact of Economic Slowdown on Textiles Industry”, was prepared by ICRA Management Consulting Services.

Over six lakh workers are estimated to have lost their jobs in the textile sector as exports crashed drastically due to the economic downturn worldwide.