Tuesday, June 16, 2009

Budget 2009: Textile ministry look for lifeline

With the Union Budget less than a month away, the textile ministry on Friday revealed its wishlist, seeking a whole set of tax exemptions and sops to enable a turnaround.

Textile Minister Dayanidhi Maran said he would make all possible efforts to provide fiscal relief, including service tax exemption to textile exporters. "As a part of the short-term strategy, we will strive to rationalise fiscal structure, exempt service ax, reduce interest rates on pre-and post-shipment credit, and facilitate faster clearance of arrears of terminal excise duties and central sales tax."

The country's textile exports declined by almost 3 per cent to $22 billion in 2008-09 against $ 22 billion in 2007-08. The slide has largely been due to the prevailing recession in the EU and the US markets, which account for 33 per cent and 21 per cent of the country's textile and clothing exports, respectively. Maran also said that he will immediately initiate consultation process to form a national fibre policy. At present, different fibres have different tax structures, which create distortion in the textile value chain.

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