No relief in Budget will lead to closures; Textile exporters

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New Delhi, Mar 2 (UNI) Textile exporters today lamented the lack of any special provisions in the Budget 2008-09 to provide relief to the sector, saying that in the absence of any credible policy support ,job losses and manufacturing units shifting to neighbourig countries will continue.

"The Union Budget is sadly a missed opportunity for ensuring long term employment and livelihood for the poorer sections and women, which the garment industry could have offered. Instead of opting for short term relief measures like loan waivers, reviving this industry could have given long term employment opportunities to much larger sections of the society," Chairman Apparel Export Promotio Council (AEPC) Rakesh Vaid said.

The industry has been crying hoarse since April about the appreciating Rupee and fast erosion of competitiveness of the sector. Garment Export Association (GEA) Secretary General Surinder Anand said the industry was expecting concrete proposals to address the issue of competitiveness and specific concerns relating to power, infrastructure and credit. However, the budget has not addressed any supply side shortages except for skill development.

The exporters expressed satisfaction at the measures taken by the government for improvement in higher education and skill development.

The exporters said the allocations for existing schemes like Technology Upgradation Fund Scheme(TUFS) will be largely insufficient to meet the requirements. The Council had been urging for refund of state levies to partly dilute the erosion in realisations, which have been to the tune of 15 per cent in the current year. Zero import duty and excise duty on machines could have encouraged fresh investment as also mordernisation, both critical for improving competitiveness of this sector.

Some of the other recommendations that the Council had been seking include ceiling of PLR for Textiles and Clothing industry below the general PLR to improve investment, enhancement in drawback to match the erosion of realisations and a Product Development Fund for incentivising product diversification.

The textile exporting community was hopeful that at least some of the policy reform options suggested in the Economic Survey, like increase in work hours to meet seasonal demand, will be exercised in the coming year.

Mr Vaid said apparel exports are expected to record a decline of 13 per cent to 14 per cent in rupee terms in the current fiscal, the steepest fall in the last five years. On the job front, losses to the tune of 6 lakh are expected in the current year.

Mr Anand said the exporting community has been left in the lurch as there was hardly anything new in the Budget proposals that will lift the sagging morale of our exporting community which is facing serious crisis because of the global slow down and sharp and persistent appreciation in the value of rupee.

The Finance Minister has failed to restore 100 per cent exemption to export earnings under Section 80 HHC of Income Tax Act. He has also failed to provide the necessary exemption from Service Tax, Fringe Benefit Tax and other Central and State Levies.

"Budget proposals are a let down for the garment exporters who were hoping for a dream budget from the Finance Minister," Mr Anand said.


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