After agriculture, the textile industry is the second largest employee in the country it contributing about 14 per cent to industrial production and 4 per cent to the GDP. It gives direct employment to around 45 million people. Off late, the industry has gone through lot of difficulties post demonetization and needs special attention in the budget.
Introduction of the GST, reduction of interest rates in parity with the international money market, tax rationalisation measures and incentives for investments in innovation and infrastructure are few of the many demands by the textile industry for the upcoming budget. It should also address concerns related to skilled workforce, labour law reforms attracting investments in the textile sector and providing a future road map for the textiles and clothing industry, it feels.
The textile industry is also of the feel that corporate income tax needs to be lowered to 28 per cent in the upcoming budget and lower it further to 25 per cent in the coming years as promised by FM. The Rs 6,000 crore package announced in 2016 for textiles and apparel sector was a step in the right direction but the industry needs lot of reforms for the revival of the growth. A major challenge for the textile industry is that it is highly capital and labour intensive sector and payback period is quite long which is many a times a big constraint for new investment in the sector.
It needs special attention for the success of Make in India, an initiative launched by Government of India under the leadership of the Prime Minister of India. The government should earnestly consider extending TUFS for another five years or so to enable companies to avail maximum benefit.
Exports are another challenge and industry is well below its targets. The textile industry has asked the finance minister to introduce measures which can boost our exports as India has the potential to become one of the biggest exporters in the world.