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DR Rajaram Jaipuria,Chairman, Indian Cotton Mills Federation (ICMF), has termed the Budget growth-oriented. "It will give a critical push to the textile sector. The proposal to bring hank yarn into the excise duty net and returning the duty to handloom weavers would certainly prevent the extensive misuse of the hank yarn duty exemptions that was prevalent in the past. At the same time, this would keep the handloom industry totally unaffected," he added.

The knitwear industry in Tamil Nadu is upset over the Budget proposal to do away with the SSI reservation for the knitting industry.

"The decision to dereserve the knitwear industry is an ill-advised move and I want the Government to reconsider this decision in view of the significant contributions made by the knitwear industry in exports," Mr A. Sakthivel, President of Tirupur Exporters Association.

He has, however, stated that he was thankful that the Government had made the Cenvat-linked excise duty scheme an optional one for the knitting industry. The organised textile mill sector has got what it had asked for — extension of the Cenvat chain to fabrics and made-ups from the yarn stage.In the process, the excise duty exemption on hank yarn has been removed, in a move intended to check duty evasion in the cotton yarn sector.

The South India Small Spinners Association (Sisspa), Coimbatore has said the introduction of excise duty on hank yarn has dealt a severe blow to the ailing spinning industry which produced the hank yarn for the handloom sector. This move will jeopardise the very survival of the spinning mills producing hank yarn, especially those located in the rural areas and employed rural women in large numbers.

It also regretted that the Government did not accede to its demand for total withdrawal of excise duty on cotton cone yarn.

The organised industry was all praise for the move to bring hank yarn under excise levy. "Now hank yarn will also attract 8 per cent duty, similar to cone yarn. This is a good move by the Government which has finally heeded the industry's pleadings," said Mr P. V. Chandran, Vice-President, Dindigul Spinners' Association.

The powerloom sector has been mostly consuming the cotton yarn in hank form, and hence, the excise duty introduced on hank yarn will severely affect this sector, said Mr M.S. Mathivanan, Chairman, Confederation of Indian Weaving Industry.

He said only hank yarn was being used for manufacture of yarn dyed fabrics and extending excise duty to hank yarn would push up the fabric cost making it uncompetitive. — Our Bureaus

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