The Textile industry is extremely disappointed with the Central Budget for 2008-09 presented in Parliament by the Finance Minister on February 29.

Mr. P.D. Patodia, Chairman CITI said that inclusive growth, which is the stated objective of the 11th Five Year Plan and was referred to by the Finance Minister in his speech, will remain only on paper, unless concrete measures are taken to encourage industries like textiles and clothing which have the potential to deliver inclusive growth. There is nothing in the Budget to address the growing crisis in this highly labour intensive industry.

Mr. Patodia stated that reduction of customs and excise duties on fibres and capital goods, a mechanism for refunding state level duties to exporters of labour intensive products and a moratorium on repayment of principal amounts against term loans taken by them would have helped in reviving the crisis ridden textiles and clothing industry.

The Budget has failed to address any of these issues. The present crisis in this industry is the result of the run away appreciation of rupee and the escalation of interest rates, which are direct results of government policies. While there may be economic reasons for pursuing such policies, it is necessary to ensure that these do not result in the decimation of labour intensive industries like textiles and clothing, which have the potential to employ large number of rural poor and women.

Ignoring the concerns of textiles and clothing industry in the Budget will have the consequence of a large number of units across the textile value chain getting either closed or reducing their level of operation, leading to substantial increase in unemployment. Loan defaults and an increasing number of NPAs will be another immediate consequence.

Ms. Akash Menon

(Tradeindia Expert)

M/S Menon Exports and Designing Ltd.

MD, M/S Menon Exports and Designing Ltd.
New Delhi, India