BUDGET ADDS FUEL TO TEXTILE INFLATION FIRE - "AAM AADMI PAR AUR BOJH"
The Budget has added fuel to the already mounting problem of the comman man with the move by our Honourable Finance Minister to impose 10% excise duty on readymade garments under Chapter 61, 62 and 63. The common man is struggling to meet his basic clothing need in the last one year due to the 150% inflation in raw cotton fibre, 100% in cotton yarn and 50% in readymade garments. The consumer is finding it difficult to balance his budget due to inflation in all basic necessity items like food, clothing and shelter. All prices are spiraling and despite best intentions and measures by Govt., inflation is still painfully high. A normal vest which a villager bought at Rs.30 in Dec, 2009 today needs to pay Rs.50 for the same thing - how will he buy that basic necessity when he needs to dish out so much more for basic food items.
The Government has announced various Budgetary proposals to enable inclusive growth and uplift the rural masses and common man. All leaders have been saying that inflation needs to be fought and have given reasons for the same as commodity hike globally. However we were all shocked to see the Union Budget further burdening the common man. This has left our whole industry shocked and numb - how can they add to inflation !!!
The Budget says that this has been done as the readymade industry has come of age. This industry is the 2nd largest employer of the country and is spread in every nook and corner of the country. This industry is the most fragmented industry in the country. The unorganised sector is much bigger than the organised sector and cloths more than 70% of the population. The Budget has differentiated between branded and unbranded clothes - however it is well known that 99% of the clothes are branded. Even the smallest manufacturer puts a label on its garments. Further the industry works mainly on work job basis and there is hardly any integration. The yarn is purchased, knitted in a different factory, dyed in a another factory. cut on a different unit, stitched elsewhere and finally packed /inspected in another unit. It is impossible for all of them to keep records as required under excise laws to satisfy the inspectors that excise is being paid by final manufacturer. The very word of excise has scared the job working units beyond belief. In case the Govt wanted revenue it should have first taxed the upstream industries which are more organised. However they have been exempted and the unorganized and fragmented part of the chain involving millions has been taxed from 0% regime to 10% duty regime. Why ? We cant find an answer !
It is known that the pen is mightier than the sword. The pen of the Budget makers has cut the neck of the millions i.e. every comman man will suffer. Now we request the pen of the media to rise to the protection of the common man and highlight the cause of the masses. This isn't the problem of the textile industry but of every person - YOU, ME AND HIM.
Further it's important to highlight that the industry is reeling under pressure due to unprecedented increase in all raw materials - cotton yarn, elastic, packaging board, sewing thread. This industry is facing capital shortage as working capital needs have gone by 100%. We all know that consumer is price sensitive and even a small hike leads to fall in consumption. All textile units from yarn to fabric to readymade/hosiery manufacturers are holding stock and are unable to sell the same. In such a scenario they have been crying for relief from the Govt and they have been handed over a 10% hit.
Kapda i.e. Clothing is a basic necessity like Roti - Govt is facing to reduce food inflation, then why is it fighting to fuel textile inflation. Raw material prices have gone up due to global rise of commodity prices, however excise duty etc is in control of the Government. They should have reduced the burden for industry and consumers.
We are appealing to the Government to immediately revoke this excise imposition and save:
· The aam aadmi (comman man) to be saved from additional burden
- The millions of workers involved in readymade and hosiery industry
- The lacs of small and medium entrepreneurs who are involved in this business for years and are already are at brink of collapse
- Save the low profile job workers and unorganised people from loads of paperwork and harassment - Inspector Raj should go with reforms, not load up on businesses.
- The Industry can resume normal operations which have been suspended since March 1, 2011
- The textile industry is given ample space and a conducive environment to grow and meet the targets set by the Government.
IN PROTEST AGAINST THIS IMPOSITION OF EXCISE DUTY BY THE GOVT., THE INDUSTRY HAS CALLED A BANDH/CLOSURE OF ONE DAY ON MARCH 4, 2011 TO PROTEST AGAINST THIS UNJUSTIFIED MOVE. RALLIES AND SIT IN PROTESTS ARE ALSO BEING ORGANISED ACROSS
Let us all join hands in this endeavour.
Federation of Hosiery Manufacturers Association of
Bangla Readymade Garment Manufacturers & Traders Welfare Association
Chamber of Textile Trade & Industry