The Hindu Business Line : More continuity

The Finance Minister, Mr Pranab Mukerjee’s second Budget in less than four months has more continuity than change. The textile industry, in particular, has some positives and one serious negative in this Budget. On the positive side is the extension of the 2 per cent interest subvention; although the industry expected restoration of 4 per cent subvention. There is a higher allocation to refund the Textile Upgradation Fund’s subsidy of Rs 3,140 crore.

The 4 per cent optional duty on cotton textiles has been restored. However the biggest negative is the increase in excise duty on man-made fibres from 4 per cent to 8 per cent; this will push up domestic prices of polyester-based textiles which are consumed by the poorer sections and reduce polyester consumption.

Cotton waste has reduced duties now; industry expected the import duty on waste to be removed as cotton itself has zero duty; giving industrial waste more protection than the agricultural product is irrational.

Direct subsidy

The higher allocation to agriculture, the nutrient-based fertiliser subsidy and moving forward to direct subsidy to farmers will go a long way to make cotton farming more profitable.

On the whole, the Finance Minister has converted the Budget from being an event to what he had said in his Budget speech “a process of continuous effort with a lot of participation from the stake-holders.”

(The author is Chairman, Loyal Textile Mills Ltd, Chennai.)

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