Textile industry gets 28 per cent more allocation in Budget 2024-25

In her Budget 2024-25 Finance Minister Nirmala Sitharaman proposed several provisions for the apparel and textile industry. The textile industry has been allocated Rs. 4,417.03 crore, or 28 per cent more in the current fiscal year 2024–25.

Sitharaman announced Rs. 600 crore under the Central programme for Cotton Corporation of India (CCI) to purchase cotton under the price support scheme. For the current fiscal year, she has suggested allocating Rs. 635 crore to the Amended Technology Upgradation Fund Scheme (ATUFS).

For the current fiscal year, 45 crore were set aside under the heading of Research and Capacity Building for the Textile PLI initiative. The entire budget allotted to research and capacity building went from 380.50 crore to 686 crore. However, no funding is provided for R&D for textiles in the current fiscal.

She also suggested lowering BCD on actual down-filling material made from duck or goose in order to increase the competitiveness of exports in the leather and textile industries. She also declared that more products will be added to the list of exempt commodities for the production of footwear, other leather goods for export, and clothing made of leather and textiles.

She also suggested lowering BCD, subject to restrictions, on methylene diphenyl diisocyanate (MDI) used in the production of spandex yarn from 7.5 to 5 per cent in order to correct the duty inversion. She also suggested streamlining and rationalising the system of export taxes on unprocessed leather, hides, and skins.

The Minister, working with State Governments and industry, unveiled the fourth programme in the PM’s package, a new centrally supported skill-building initiative aimed at encouraging skill development. Over the course of five years, 20 lakh adolescents will receive skills under the programme. Furthermore, 1,000 Industrial Training Institutes (ITIs) will receive upgrades in the form of outcome-oriented hub-and-spoke systems. The design and content of the courses will be in line with the industry’s skill requirements, and new courses will be added to meet new demands.

A Credit Guarantee Scheme will be implemented to enable MSMEs to obtain term loans for the purchase of machinery and equipment without the need for collateral or a third-party guarantee. Each applicant will receive guarantee cover up to Rs. 100 crore from a separately established self-financing guarantee fund, while the loan amount may be greater. An annual guarantee fee on the decreasing loan balance as well as an upfront guarantee cost will be required of the borrower. Public sector banks will develop their own capacity to update the MSME credit assessment model rather than depending on outside assessment.

Additionally, she disclosed a new system that will make it easier for MSMEs to continue receiving bank loans at a difficult time. The PPP model will be used to establish E-Commerce Export Hubs so that MSMEs and traditional craftspeople can sell their goods abroad. These centres will enable trade and export-related services under one roof, all within a smooth regulatory and logistical framework.

In cooperation with the states and the business sector, the Government will make it easier to establish fully equipped “plug and play” industrial parks in or close to 100 cities by making greater use of town planning plans.  The National Industrial Corridor Development Programme would also approve twelve industrial parks.