Maran moots higher subsidy, tax sops

The textile ministry, in its Budget wish list, has recommended additional tax benefits and increased interest subsidy for exporters.

“As part of the short-term strategy, the government will try to rationalise the fiscal structure, exempt (exporters) from service tax, reduce interest rates on pre- and post- shipment credit, and facilitate faster clearance of arrears of terminal excise duties and central sales tax,” said Union Textiles Minister Dayanidhi Maran.

But he did not provide details of any tax changes that the textile ministry has sought from its finance counterpart.

Clearing the backlog of Technology Upgradation Fund Scheme (TUFS) would be high on the list of priorities for the ministry, he said in an interaction with industry representatives. Under TUFS, the government provides 5 per cent interest subsidy on loans taken by textile firms to upgrade their technology.

The assurance comes in the backdrop of around 2 per cent decline in India’s textile exports, which are estimated at $21.75 billion in 2008-09, due to slump in key markets such as the US and Europe. “The industry is optimistic and so am I that exporters will get back to the regular level of 7-8 per cent growth year-on-year,” added Maran.