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Before building Mega Textile Parks, Govt must study why they failed in the past: CMAI

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The Clothing Manufacturers Association of India (CMAI) the apex association of the Apparel Industry of India has welcomed Union Budget 2021, which was presented in the Parliament by Hon’ble Finance Minister Smt Nirmala Sitharaman.

Rajesh Masand, President, CMAI said that the announcement on the 7 Mega Textiles Parks was the highlight of the Budget directly impacting the Textile Industry. “This is in line with the Government’s intention to encourage mega projects and increase the scale of operations in the Textile Industry. This has to be applauded. A particular positive aspect of this scheme is the incorporation of Plug & Play Model which will enable the members of such parks to avoid huge capital expenditure outlays,” he explained.

Masand further stated that lack of scale has been the bane of our efforts to increase our share in global trade especially in the Apparel sector. “However, the Government also has to very closely study why Textile Parks have not really succeeded in the past. It is very crucial to avoid errors of omission and commissions in the past. Otherwise, this will remain one more well intended scheme which fails to lift the fortunes of the Textile Industry,” he stated.

He further pointed out that the increase of import duty on cotton and cotton fiber may not impact the industry too adversely since the current imports are at a miniscule level. However, this does come at a time when the industry is reeling from an unprecedented increase of raw material prices especially yarn and could send a wrong signal.

In an indirect manner though, Budget 2021 has made several announcements which will have a positive impact on consumer spending – such as increases in infrastructure and overall government expenditure – and this will help the industry, especially the Apparel sector.

“The permission to form a one-person Company may also indirectly benefit smaller apparel manufacturers, many of whom are in the micro sector and run one-man shows. They are likely to get much more support from the banking system than ever before. The increase of the tax audit slabs should also benefit the smaller members of the Apparel sector,” Masand concluded.

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