Industry & Economy
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Textiles
Special focus on textile sector
Our Bureau
New Delhi
,
Feb. 28
THE Finance Minister, Mr P. Chidambaram, has cut the excise duty on polyester filament yarn (PFY) from 24 per cent to 16 per cent and halved the customs duty on textile machinery to 10 per cent.
In his Budget for the next fiscal, the Finance Minister has also proposed a 10 per cent capital subsidy scheme for the textile-processing sector.
Other proposals included augmenting the Rs 25,000-crore Technology Upgradation Fund Scheme (TUFS) and a cut in import duty on textile products, including polyester, textile fibres, yarns and intermediates, fabrics and garments, from 20 per cent to 15 per cent. The Budget has also extended the optional duty regime to the processed filament yarns (including PFY) manufactured from yarn procured by independent processors.
According to the proposal in the Budget, such yarn would either attract zero excise duty, without availing Canvas credit, or pay eight per cent with Canvas credit.
The Budget also mentions the creation of a Manufacturing Competitiveness Programme to improve the small-scale and medium-sized manufacturing industries. Mr Chidambaram has also announced Rs 40-crore for modernisation of 20 clusters of handloom manufacturers and a 10 per cent capital subsidy scheme for the textile-processing sector. The Technology Upgradation Fund Scheme, which has helped small and medium textile industries to upgrade their machinery and increase capacity, has received enhanced allocation of Rs 435 crore. In a bid to attract investments into the small-scale sector, textile products such as hosiery items have been de-reserved.
In his Budget speech, Mr Chidambaram said that there was a new vigour in the textile sector and that the sector had huge potential for employment and exports. It is estimated that the investment made in 2004-05 in this sector was Rs 20,000 crore and it is likely to go up to 30,000 crore this year, he said. Outlining efforts of Government to push up employment, he said the textiles sector has a potential to create 1.2 crore jobs.
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