New Delhi, Feb 23 (Inditop.com) Amid speculation of partial withdrawal of stimulus in the coming budget, Textiles Minister Dayanidhi Maran Tuesday urged the government to continue the incentives for some more time as the sector is to fully recover from losses.
“I am sure that the views of the industry will be considered by the finance minister. We (textile ministry) support the views of the industry. It’s not that we have moved out of the recession,” the minister told reporters on the sidelines of a function organised by the Carpet Export Promotion Council here.
India’s textile sector reported five percent growth in December 2009 and seven percent growth this January after registering an average decline of 15 percent during April-November 2009.
The sector, employing about 35 million people, had left thousands of units shut and about 700,000 job losses in 2008-09. This had resulted in decline in India’s textile exports by nearly two percent at $21.75 billion (Rs.1.08 lakh crore) in 2008-09, compared to 2007-08, due to lower demand from Western markets following the economic slowdown worldwide in 2008.
The textile sector currently gets incentives in the form of subsidies on bank loans and duty cuts besides refunds on service tax and import duties on capital goods. Also cluster development of textile units is part of the incentives being offered to the industry.
Finance Secretary Ashok Chawla last month said that there won’t be any further fiscal stimulus for the textile sector as exports are growing and domestic demand is strong. “Exports mainly to the developed countries have improved as they are coming out of recession,” Chawla had said.
A top finance ministry official told Inditop that textiles exporters were doing good business with the United States and other European markets. The government expects the textile sector to grow positively in the next fiscal.
rounak