The enthusiasm with which the industry had welcomed the new Government seems to be on the wane, as one disappointment after the other hits the industry.
The Modi Government has many visionary plans and ‘Make in India’ is one of them, but despite repeated requests and representations by various industry bodies, the garment industry has not been given the necessary thrust to be among the manufacturing industries of preferences. This is indeed sad, as the industry is among the largest employers and an increase in manufacturing capacities would translate into many new jobs, not only in metros, but also villages.
Talking of employment opportunities, while the Government gave its nod to the MGNREGA scheme with an increased budget, again the garment manufacturing industry was not considered as a rightful partner to generate employment. I heard one exporter saying disgustingly that the Government preferred to ask villagers to dig holes and refill them, rather than put them into a constructive activity which was to the advantage of the worker, the industry and the country, with increased foreign exchange revenues.
Even the promised new textile policy has not yet been finalized and the suggested changes in the labour laws remain a dream. When we asked the industry to share what they felt was the Government’s positive contribution to the growth of the industry, most felt disheartened by the lack of pro-activeness in supporting the industry and others openly felt that the Government was not exporter-friendly.
Yet again the industry felt let down when the first full year budget was devoid of any benefit to the industry… Many association heads, representing both garment exports and textile mills, wrote to us expressing disappointment. Two major associations – the AEPC and the SIMA – were critical of the Government’s attitude towards the industry.
Reacting to the Union Budget 2015-16 announcements, Chairman of AEPC, Virender Uppal wrote, “Garment Export Industry was expecting favourable announcements with regard to the inclusion of fabrics to the extent of 2% of FOB value under the overall 5% entitlement in custom notification 10/2015, dated 01.03.2015, announcement on the 3% interest subvention for garment exports, deduction in the income tax for undertaking research and development, reducing the threshold investment limit from Rs. 25 crore to Rs. 1 crore, etc…” Chairman of AEPC appealed to the Finance Minister to reconsider the request of AEPC…, which is the industry which can generate Rs. 1 lakh crore of exports by SME’s…
T. Rajkumar, Chairman, Southern India Mills’ Association (SIMA), appealed to the Centre to reconsider certain major demands of the textile industry, like removal of import duty and reduction of central excise duty on man-made fibres, allocation of adequate funds for the ongoing and all the pending cases of Technology Upgradation Fund Scheme, and removal of central excise duty on shuttleless looms. SIMA’s Chairman has pointed out that the increase of service tax including education cess from 12.36% to 14% and also the central excise duty from 12.36% to 12.5% would affect the competitiveness of the textile industry, which is already reeling under recession.
Both these associations met the Textile Minister and appraised him of the need to support the industry… but disappointment again loomed as the recently released FTP too has nothing in it for the textile and garment industry!
The statement from SIMA President said it all… “The recently announced Union Budget has not considered the demands of the textile industry except extending the optional Cenvat route for cotton textiles. The FTP 2015-2020 announced yesterday, though had constructive policies at a macro level, failed to address sector-specific issues.” Going a step further, he appealed to the Prime Minister and Union Minister of State (Independent Charge) for Commerce and Industry to have a relook on the FTP and consider the pleas made by the industry to regain its global competitiveness.
He has rightly pointed out that the country is plagued with high tariff barriers, high interest rates, high transaction cost and high import duties on raw materials and machinery, preventing the industry from achieving its potential growth rate.
So what should we read into this… Is the textile and garment industry destined to be a neglected industry with no successive Governments seeing any real potential in the sector?
I think it is time for us as an industry to stop looking at the Government for support and work internally to make a dent in the international market like the IT industry did…, may be then the Government will give a favourable hearing to this age-old, but neglected industry.
Easier said than done!
