The 2024 budget has sparked a range of reactions from garment industry leaders. While many applaud the strategic moves, others call for more details and careful implementation. Here’s a look at their perspectives on the budget’s impact on the textile and retail sectors.
Rahul Mehta, Chief Mentor, Clothing Manufacturers Association of India (CMAI)
Rahul Mehta praised the budget for its pragmatic and innovative approach to boosting employment. “This budget is extremely pragmatic and innovative in some of the bold decisions and directions it has taken to encourage employment directly,” Mehta stated. He highlighted initiatives such as the internship scheme and reimbursement of one month’s wages for new employees, alongside subsidies for those earning over a lakh of rupees.
Mehta emphasized the benefits for the labor-intensive textile and apparel industry. “Whilst most of these measures are for all industries, they will likely benefit the textile and apparel industry equally, if not more, since it is more labor-oriented,” he explained. He also pointed out that the budget’s support for MSMEs and easing of foreign investment norms would enhance the industry’s competitiveness. “Import relaxation for essential raw materials, trims, and accessories will help garment manufacturers compete better in export markets,” he added.
Kumar Rajagopalan, CEO, Retailers Association of India (RAI)
Kumar Rajagopalan acknowledged the government’s balanced approach, combining populist measures with policy reforms. “The government has tried to strike a balance between populist and policy measures,” Rajagopalan remarked. He welcomed initiatives aimed at empowering the middle class and rural populations, such as increased exemptions in personal income tax and higher standard deductions, which he believes will boost disposable income and consumption.
The reduction in duties on gold, precious metals, and mobile phones was seen as a significant boost, especially for the festive season. Rajagopalan also praised the focus on skilling and employment support for the youth. “The government’s commitment to skilling and employment support, including initiatives for youth employment and skilling programs, ensures a future-ready workforce in the retail sector,” he stated.
Rajagopalan appreciated the emphasis on MSMEs and startups, including enhanced lending and the abolition of the angel tax. “The budget’s emphasis on MSMEs and startups, including enabling more lending and abolishing the angel tax, is a positive step towards realizing their potential. Tax simplification and compliance have also been addressed,” he mentioned. Additionally, he highlighted the establishment of working women’s hostels and creches as crucial for supporting women in the retail sector. “The focus on developing infrastructure for shopping in urban development is a significant step forward,” he concluded.
Sanjay K Jain, Chairman of ICC National Textiles Committee, and CITI
Sanjay K Jain highlighted the increased budget allocation for textiles, noting a rise to ₹4300 crore from last year’s allocation of ₹3400 crore. “The increased budget allocation for textiles is a positive sign, ensuring ongoing schemes will likely receive adequate funding,” Jain stated. He also noted specific increases, such as the allocation for the Production Linked Incentive (PLI) scheme, which jumped from ₹5 crore to ₹45 crore for 2024-25. Additionally, research and capacity-building funds saw an 80.3% increase, largely driven by the PLI and National Technical Textiles Mission (NTTM) schemes.
Jain welcomed the significant boost to the PM MITRA scheme, which saw an allocation rise from ₹52.3 crore to ₹300 crore. He added that allocations for the Rebate of State and Central Taxes and Levies (RoSCTL) and the Remission of Duties and Taxes on Exported Products (RoDTEP) programs also increased by 10% and 5.8%, respectively.
Despite these positive steps, Jain remained cautious about the indirect benefits of the budget. “The incentives for employment and measures to ease credit costs and access for MSMEs are significant, given the labor-intensive nature of the garment industry,” he noted. Jain underscored the importance of skilling initiatives to support industry growth. However, he also emphasized the need for clarity and effective implementation of these measures to truly benefit the sector.
The 2024 budget has been met with a mix of optimism and caution from garment industry leaders. While the pragmatic and innovative steps towards employment and support for MSMEs are praised, there is cautious optimism regarding the finer details and implementation of these initiatives. The increased allocations for various schemes and the focus on research, capacity building, and skilling are seen as positive moves. However, industry leaders await more specific details and actions to fully assess the budget’s impact on the textile and apparel sectors.
