MUMBAI: The steps of extending technology upgradation funds for five years with enhanced allocation of funds from Rs 540 crores to Rs 910 crores during 2007 -08, reduction in custom duty on polyester and yarns from 10-7.5 percent and outlay of Rs 430 crores for scheme for integrated textile parks are taken in the right direction, Mr. Vasdev Loond, President, Garments Exporters Association (GEA) said in a release.
However, the continuation of service tax on exports even dragged to the contractual jobs, over and above the rising cost of manpower and the additional imposition of education cess from 2-3 percent, are discouraging and disappointing features in the Budget and will affect the competitiveness of the Indian garment exports.
The globalisation is already affecting the small and medium size exporters due to lower purchase prices from the buyers, shorter lead time, keen competition from China etc.
The president further feels that government is buoyant by the 9 percent growth but is insensitive to the suffering of the garment exporting community and urges to assist and accelerate the building and functioning of SITPs and SEZ and reconsider withdrawing service tax on garment exports which will not only help in boosting exports but will also provide immense and continued employment to the poor section of the society in particular.
Hence GEA reiterates service tax withdrawal on garment exports as this very well goes with the government policy of improving the employment potential of the textile industry and uplifting the social web of the people.
On the whole, the Garments Exporters Association is disappointed as no specific measures have been announced to reverse the recent downturn in garment exports.