The Hindu : Business : Package for man-made fibre units

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Wednesday, Mar 01, 2006

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Package for man-made fibre units

Special Correspondent

Excise, customs duty cut on synthetic fibre and filament yarn

New initiatives for handloom sector Jute Technology Mission to be launched Allocation to TUF scheme increased

— Photo: PTI

CAPTAINS WATCH: Industrialists watch on-screen presentation programme of budget 2006-07, in Mumbai on Tuesday.

NEW DELHI: As part of the budget proposal for 2006-07, Union Finance Minister P. Chidambaram on Tuesday announced a package of reliefs for the man-made textile industry, which had been going through a rough patch in recent times.

The package includes a reduction in the excise duty on all man-made fibre yarn and filament yarn from 16 per cent to eight per cent, a cut in the import duty on all man-made fibres and yarns from 15 per cent to 10 per cent and a lowering of import duty on raw materials such as DMT, PTA and MEG from 15 per cent to 10 per cent. In addition, the import duty on paraxylene is proposed to be brought down to two per cent.

"The cotton textile industry has benefited from the relief granted two years ago. The man-made textile industry is a growth-and employment-driver. It (also) deserves encouragement,'' Mr. Chidambaram said.

The relief package comes on the heels of the recommendations of the Economy Survey for special measures to bale out the synthetic textile industry.

The report tabled in Parliament on Monday had rued that the textile industry as a whole had posted a negative export growth despite the total removal of the quota system from January 1 last year and had specifically called for measures to redress the problem of ``lacklustre'' growth in the synthetic segment.

In his budget speech, Mr. Chidambaram also announced several new initiatives for the handloom sector. The proposals include launching of a `handloom' mark on the lines of the `woolmark' already in existence for wool products; setting up of yarn depots in different parts of the country to ensure uninterrupted supply of yarn to weavers; and introduction of a scheme similar to TUF that would provide interest subsidy on term loans. In addition, 100 more handloom clusters are to be developed at a cost of Rs. 50 crore during the next financial year. There is also some good news for the jute industry in the budget proposals. The Finance Minister announced proposals to launch a Jute Technology Mission and to set up a National Jute Board.

"I propose to make a token provision (for the Board), with the assurance that funds would be made available once the outlay is finalised,'' he said. He announced that the allocation for the TUF scheme would be increased from Rs. 435 crore to Rs. 535 crore and that Rs. 189 crore would be provided for integrated textiles parks. The scheme was launched in October last, with the aim of creating 25 such parks. So far, seven have been sanctioned and 10 more have been identified for development.

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