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| February 28, 2001 | Feedback | |
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 Import duty down at 20%, surcharge abolished for textile sectorBS Corporate Bureau Though the finance minister has sought to bring much needed relief to the textile industry in his budget, it has fallen short of the industry's expectations. The main demands of the textile industry were a reduction in the import duty on PTA/DMT/MEG and caprolactum, key inputs for synthetic fibre, from 25 per cent to 10 per cent and withdrawal of the 10 per cent surcharge. While the government has totally abolished the surcharge, it has brought down the import duty from 25 per cent to 20 per cent. Thus, the effective reduction in the import duty works out to 7.5 per cent -- from 27.5 per cent to 20 per cent. This is expected to bring some relief to synthetic fibre producers as well as the textile industry. The move is also expected to result in the substitution of cotton in the industry. There are, in addition, other fiscal incentives packed in the budget for the textile sector. Those weaving and processing units that have made new investments through the Technology Upgradation Fund will now be allowed an accelerated depreciation of 50 per cent on plant and machinery. The import duty on specialised textile machinery has been cut from 15 per cent to 5 per cent. The industry had demanded duty-free import of all textile machinery. In addition, the import duty on silk and cotton waste too has been reduced. On the expenditure side, the corpus of the Technology Upgradation Fund has been increased from Rs 500 million in the current fiscal to Rs 2 billion in 2001-02. At the same time, the textile ministry's budgetary allocation has been raised from Rs 457 crore in this fiscal to Rs 6.50 billion in 2001-02. The finance minister also announced that a target has been set to upgrade 300,000 looms with assistance from the fund by 2004. He also announced that the government would set up integrated apparel parks, where state of the art units can be set up. A sum of Rs 100 million has been set aside for this. Source: Business Standard ALSO READ:
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