The industry receives no incentive or announcement with large tickets.
Experts say that budget announcements alone cannot boost production. (Photo: Reuters)
In spite of the government's “Make in India” campaign, production in the country has declined. This is not good news as the industry is a big job provider. The finance minister announced several plans, including one to make India a hub for electronic manufacturing, an announcement in line with the “Assemble in India” pitch of the economic survey. A national mission for technical textiles has also been announced. With an expenditure of 1,480 rupees, it is expected to boost textiles and help India regain its competitiveness. However, these suggestions are not enough to create jobs in the industry or attract large investments.
However, experts say that budgetary announcements alone cannot boost production. States play a big role in supporting manufacturing, says R.C. Bhargava, chairman of Maruti Suzuki. "States need to try to cut manufacturing costs through incentives like tax breaks," he says. In addition, demand must increase when manufacturers have to build new capacities. A product like a car has a huge multiplier effect in job creation. But it will continue to be heavily taxed.
What about the lower income tax rate announced by the government? "The income tax sops worth 40,000 rupees make up a small percentage of total consumer spending. They are not a cornerstone," says Bhargava. A reduction in manufacturing costs is necessary.
The textile sector welcomed the abolition of the anti-dumping duty on purified terephthalic acid or PTA, an important raw material in the polyester industry, which was imported from countries such as China, Indonesia, Taiwan and Malaysia. Despite the deficiency, an anti-dumping duty of $ 27-160 per ton was levied on PTA, depending on the exporting country. Removal will make India more competitive, says Ashwin Chandran, chairman of the Southern India Mills & # 39; Association.