The clothing manufacturers Association of India (CMAI) stated that the budget 2010-20 announced by Finance Minister Nirmala Sitharaman is a mixed bag for the textile and apparel industry.
Giving his reaction on the budget, Rahul Mehta, President CMAI, stated that the extension of lower rate of 25% corporate tax with an annual turnover of up to Rs 400 crores is a welcome step. Currently this rate is only applicable to companies having annual turnover of Rs 250 crores.
He further said, “The infusion of Rs. 70,000 crore capital into public sector banks will ease the current credit squeeze. In addition, Rs. 350 crore allocated for 2% interest subvention for all GST registered MSMEs on fresh or incremental loans will give a big thrust to MSMEs. Considering that over 80% of the domestic apparel industry is in the MSME sector, all these measures can give a boost to the sector.”
Mehta said, “On the other hand, though all the details have not been announced, the relaxing of local sourcing norms for FDI in single brand retail can be detrimental for the growth of the domestic apparel manufacturing industry. He felt that this move could work against the government’s drive towards make in India. This will however, encourage FDI in Retail.