The Hindu Business Line : `Drop move to raise excise duty on viscose filament yarn'

THE proposed move in the Central Budget to increase the excise duty for the viscose filament yarn from 12 per cent to 16 per cent should be given up as it will seriously affect the interests of the handloom industry, the Madurai Kaithari Javuli Urpathiyalargal Sangam (Association) has said.

According to the Sangam, unless the earlier excise rate of 12 per cent is restored, the livelihood of more than two lakh people engaged in the traditional industry and belonging to the below-poverty line, is at stake.

The move will only add to the woes of already struggling people, living a hand to mouth existence.

The Sangam has pointed out that handloom weavers in Madurai, Paramakudi, Dindigul, Aruppukkotai, Emaneswaram, Chinnalapatti,, Ramanathapuram, Tirunelveli, Kottar and other parts in the southern districts produce finer handloom varieties blending more than 60 per cent viscose filament yarn with cotton. They face severe competition from polyester filament yarn using industry.

The proposed increase in the excise duty in the budget from 12 per cent to 16 per cent together with the withdrawal of additional excise duty and along with a levy of an educational cess of 2 per cent, worked out to a net increase in excise duty to 2.52 per cent. The resultant impact in terms of an increase in the prices for the viscose filament yarn is expected to go up by about Rs 5 per kg.

In the context of another proposed move in the Budget, i.e., to scale down the excise duty on polyester filament yarn by 3.12 per cent upon the withdrawal of additional excise duty, the position of the handloom sector would get worse.

The implication is that, including the proposed educational cess, the excise duty on polyester filament yarn will drop from the current rate of 27.6 per cent to 24.48 per cent. The polyester yarn prices will drop by about Rs 6 per kg.

Thus, while the polyester filament yarn using mill sector stands to gain, the viscose filament yarn using handloom sector will be affected due to the increase in the prices of raw materials.

The handloom industry will not be in a position to compete with the power loom and mill sector.

The handloom weavers will be thrown out of their jobs and forced to starve, the Sangam has warned.

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