October 3, 2022
  • October 3, 2022

What’s in the Union Budget 2022-23 for India’s Textile Industry?

By on February 1, 2022 0
Indian Finance Minister Nirmala Sitharaman today presented Union Budget 2022-23 in Parliament. Here are excerpts from the speech, which may have an impact on the textile industry.

MSME

Udyam, e-Shram, NCS and ASEEM portals will be interconnected. Their field of action will be widened. They will now operate as portals with live organic databases, providing G2C, B2C and B2B services. These services will focus on credit facilitation, training and recruitment with the aim of further formalizing the economy and improving entrepreneurial opportunities for all.

Indian Finance Minister Nirmala Sitharaman today presented the Union Budget 2022-23 in Parliament. Here are excerpts from the speech, which may have an impact on the textile industry. Udyam, e-Shram, NCS and ASEEM portals will be interconnected. Their field of action will be widened. The Credit Guarantee Trust System for Micro and Small Enterprises (CGTMSE) will be revamped.

Emergency Line of Credit Guarantee Scheme (ECLGS) provided much needed additional credit to over 130,000 MSMEs. This has helped them mitigate the negative impact of the pandemic. Hospitality and related services, especially those of micro and small businesses, have yet to return to pre-pandemic levels of activity. Considering these aspects, the ECLGS will be extended until March 2023 and its warranty coverage will be extended from ₹50,000 crore to a total coverage of ₹5 lakh crore, with the additional amount exclusively reserved for hospitality and related businesses.

The Credit Guarantee Trust Scheme for Micro and Small Enterprises (CGTMSE) will be revamped with the required injection of funds. This will facilitate additional credit of ₹2 lakh crore for micro and small businesses and expand employment opportunities.

The Raising and Accelerating MSME Performance (RAMP) program with an expenditure of ₹6,000 crore over 5 years will be rolled out. This will help the MSME sector to become more resilient, competitive and efficient.

Export Promotion

86. The Special Economic Zones Act will be replaced by new legislation that will allow states to become partners in the “development of business and service clusters”. This will cover all major existing and new industrial enclaves in order to make optimal use of available infrastructure and improve export competitiveness.

Special Economic Zones

Along with the proposed reforms in the SEZs, we will also undertake reforms in the customs administration in the SEZs and this will now be fully IT driven and run on the National Customs Portal with a focus on greater facilitation and with only risk-based controls. This will greatly facilitate the business of SEZ units. This reform will be implemented by 30and September 2022.

Project imports and capital goods

The National Capital Goods Policy, 2016 aims to double the production of capital goods by 2025. This would create employment opportunities and result in increased economic activity. However, several duty exemptions, even up to more than three decades in some cases, have been granted to capital goods for various sectors such as energy, fertilizers, textiles, leather, footwear, food and fertilizers. These exemptions have hampered the growth of the domestic capital goods sector.

Accordingly, it is proposed to phase out preferential rates on imports of capital goods and projects and apply a moderate tariff of 7.5 percent. Certain exemptions for advanced machines that are not manufactured in the country will be maintained.

Review of customs exemptions and tariff simplification

In the last two budgets, we have streamlined several customs exemptions. We have again conducted extensive consultation, including crowdsourcing and as a result of these consultations, it is proposed to phase out over 350 exemption entries. These include the exemption of certain agricultural products, chemicals, fabrics, medical devices and drugs for which there is sufficient national capacity. In addition, as a simplification measure, several preferential rates are incorporated into the Customs Tariff itself instead of prescribing them through various notifications.

This comprehensive review will simplify the customs rate and tariff structure, especially for sectors such as chemicals, textiles and metals, and minimize litigation. Removing the exemption on items that are or can be made in India and granting preferential duties on raw materials that go into the manufacture of intermediate products will go a long way towards achieving our goal of ” Made in India” and “Atmanirbhar Bharat”.

Exports

To encourage exports, exemptions are granted on items such as ornaments, trimmings, fasteners, buttons, zippers, lining materials, specified leather, furniture fittings and packing boxes which may be required by bona fide exporters of handicrafts, textiles and leather garments, leather footwear and other goods.

Fibre2Fashion Information Desk (RKS)