The Union Budget for The Financial Year 2014-15

The Union Minister of Finance Shri Arun Jaitley announced the Union Budget for the financial year 2014-15.

In a statement Shri Manikam Ramaswami, Chairman, Texprocil welcomed the various announcements and stated the budget in general is a positive budget.  There are several new ideas together with continuity. Focus on poverty reduction; agriculture etc will help the poor have more disposable income which is essential for the textile industry.

Handlooms have at last been identified as a Handicraft, and 6 clusters in areas where hand loom weavers are artisans making heritage textiles are to be set up with integrated skill development and Training facilities.  They are also places of tourist interest and with tourism promotion; heritage textiles too will get promoted. This augers very well to preserve and nurture our rare heritage skills.

Focus on agriculture and organic cultivation, urban waste conversion into organic manure will further strengthen India's preeminent position as the world's largest Organic textile producer.

Logistics cost reduction, moving cargo over rail and water which are far more efficient than moving it over roads will reduce costs as textile manufacturing has a high logistics cost component.

Cheap loans to rural self help groups will rebate distributed garment manufacturing capacities which together with deeper penetration of E-business make ready to wear garments highly affordable and spur consumption.

Shri Ramaswami also welcomed the removal of service tax on loading, unloading, storage, warehousing and transportation of cotton whether ginned or baled.

However, Shri Ramaswami opined that the introduction of excise duty on polyester produced from waste is a serious retrograde step.  Recycling of waste plastics and pet bottles into fiber helps waste realize a high enough price to encourage separation of this dangerous non bio degradable waste from bio degradable digest able waste.

The high price the waste gets makes this expensive segregation of waste a viable activity. Levying excise duty on the fibers produced will increase crude consumption and reduce waste segregation activity which is detrimental to the environment. These retrograde steps of creating inverted duties and not reducing existing inverted duties need to be done away with at the earliest.