Money > Budget > Budget News & Analysis FEBRUARY 18, 2002 | 16:45 IST    rediff.com 


     Budget Special
The Union Budget 2001-02
Economic Survey 2001-02
Exim Policy 2001-02
Credit Policy 2001-02
Railway Budget 2001-02
Budget Tutorial
Budget Process
Budget 2000-01
Budget 1999-2000
 



Textile industry moots excise duty rationalisation

Ten days before the Union Budget, chief executive officers of India's leading textile companies held a round table with textile secretary S B Mohapatra arguing that there is a strong case of excise duty rationalisation by Finance Minister Yashwant Sinha on February 28, 2002.

Mohapatra did not give any clue as to what is in store for the textile industry struggling to keep its head above water in the highly competitive global market.

''We have forwarded their (industry) recommendations to the finance ministry,'' the textile secretary told reporters on the sidelines of the round table. However, Mohapatra said he would not like to share the government's views on the industry's wish list which many a time, contains conflicting interests.

On their part, the CEOs said there were distortions in the fiscal regime. To back up their claims, a Confederation of Indian Industry study conducted by Accenture was unveiled on the occasion.

The study said on the fiscal policy side,'' it is imperative to announce a roadmap of implementing ideal scenario which can unleash rapid and sustainable growth of the industry''.

It said despite many advantages, the industry performance has been sub-optimal in comparison to other countries.

''India's share in re-location of world trade has been extremely low in comparison to countries like China and even Sri Lanka and Bangladesh'', the Accenture study said.

The CEOs said there should be a single rate of excise duty across the entire value chain. The complex regime of exemptions must go and the overall duty level should be reduced to eight per cent. The high rate of duty provides economics for evasion.

Mohapatra referred to the misuse of the facility given to exporters for concessional imports.

''I had myself detected 230 cases of misuse in Mumbai,'' he said.

However, he asked the exporters to take their case to the commerce ministry which is in the process of framing the new export-import policy.

The textile secretary said unless the Indian industry modernised within the next 1000 days before the Multi Fibre Agreement was abolished from January 2005, there was little future for it.

The failure of the Textile Upgradation Fund to excite the industry for modernisation has been due to the bad investment climate. Under the TUF, the government offers the interest subsidy on the money borrowed for modernisation. ''The question of subsidy comes only if the industry goes to the banks and seeks funds ''.

The banks and financial institutions do not consider textile as a sun rise industry. They have sunk large funds and are burdened with huge non-performing loans.

The central theme of the round table was that it was a difficult position for the textile industry and the government and major players have to find a way out.

UNI

YOU MAY ALSO WANT TO READ:
The Rediff Budget Special
Run-Up To The Budget
Money


 
  © 1996 - 2002 rediff.com India Limited. All Rights Reserved.