Budget Allocation for Textile Ministry Rises 36% to Rs 6,227 Crore

Budget allocation for textile ministry rises 36% to Rs 6,227 crore

The Budget has allocated Rs 6,227 crore for the textile ministry for the next fiscal, representing a 36% hike from the budgetted level of Rs 4,595 crore a year earlier, as the government steps up focus on labour-intensive sectors to create more jobs.

The annual rise in budgetary allocation for the textile ministry has been marginal in recent years, and in 2013-14, it even witnessed a cut in outlay from a year before.

However, the outlay for the next fiscal is a tad lower than the revised estimate of R6,286 crore for 2016-17, as allocation had to be raised substantially mid-way this fiscal under the Amended Technology Upgration Fund Scheme (ATUFS) to settle a major chunk of pending claims pertaining to earlier years and also to provide for a new duty drawback scheme that was announced as part of a special package for the garments industry in June last year (after the 2016-17 Budget was presented).

These two major schemes — TUFS and the remission of state levies (RoSL) to the garments industry under the duty drawback scheme — have been allocated R2,013 crore and R1,555 crore, respectively, accounting for over a half of the total outlay for 2017-18.

Analysts say although the budgetary allocation for 2017-18 is slightly lower than the revised estimate for the current fiscal, there is a chance that the ministry will get more funds under these schemes if required.

FE had reported on January 30 that the ministry could be allocated R6,200-6,500 crore and the government could provide more than R2,000 crore for the ATUFS and over R1,500 crore for the duty drawback scheme in the Budget for 2017-18.

While the allocation for the ATUFS was raised to R2,610 crore in the revised estimate for 2016-17 from the budgetted level of R1,480 crore, R400 crore was provided for the RoSL in the current fiscal.

However, most of the other schemes barely saw any change in allocation for 2017-18 from the budgetted level last year.

The annual rise in budgetary allocation for the ministry has been marginal in recent years, and in 2013-14, it even witnessed a cut in outlay from a year before. The ministry was even pulled up by a parliamentary standing committee in 2015 for slow spending in previous years.

However, the panel observed that the ministry, of late, had improved its pace of expenditure. The textile and the garment sector assumes importance as it employs close to 32 million people, having become the largest employer after agriculture.

Rahul Mehta, president of the Clothing Manufacturers’ Association of India, said 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. For instance, the reduction of the corporate tax to 25% for small companies with turnover of up to R50 crore will cover a large number of garment units.

(Source: The Financial Express, February 03, 2017)