Budget 2024 allocates INR 4,417.09 crore to the textiles sector, marking a significant
increase from the revised estimate of INR 3,443 crore for 2023-24. This substantial boost
aims to drive growth and development for Textile Manufacturers in India.
Finance Minister Nirmala Sitharaman announced the Union Budget 2024-2025 in the
parliament on July 23. This is her seventh consecutive Union Budget, in which she
highlighted the government’s key priorities. While it disappointed investors and middle-class
income holders, it rewarded the textile industry, fabric suppliers, and textile manufacturers
in India.
Priorities of the Budget
In the budget, Nirmala Sitharaman highlighted the government’s focus on the following
areas:
- Agriculture industry’s productivity and resilience
- Innovation, research, and development
- Next-generation reforms
- Energy security
- Human resource development and social justice
- Social justice
- Manufacturing and services
- Employment and skilling
- Infrastructure urban development
How the Budget Benefits the Textile Sector and Fabric Suppliers?
The textile industry in India is the second largest employment generator, followed by the
Agriculture industry. It currently provides direct and indirect jobs to over 11 crore people.
The Indian textile industry is MSME in nature. The Government of India, led by the
Honorable Prime Minister, who’s reelected for his third term, has been giving many
opportunities, grants, and relief to boost and strengthen the MSME sector.
Some of the groundbreaking initiatives by the GOI for MSMEs include significant relaxation
in eligibility criteria, with asset values raised to INR 50 crores and an annual sales turnover of
INR 250 crores. These changes have allowed over 80% of textile manufacturing units in the
country to qualify as MSMEs. This adjustment has proven advantageous for the textile
manufacturers in India during and after the pandemic.
In a press release issued on July 22, 2024, Dr. S.K. Sundararaman, Chairman of The Southern
India Mills’ Association (SIMA), highlighted that the Union Budget’s focus on employment,
skilling, and MSMEs would significantly benefit the labor-intensive textile industry.
Textile Industry Receives 28% Increase in Budget Allocation
The Union Budget 2024 -2025 has increased the allocated budget for the textile sector by
INR 974 crore to INR 4,417.09 Crore. The budget also raised the allocation for research and
capacity building to INR 686 crore from INR 380 crore. The proposal also includes reducing
the basic customs duty (BCD) on real down-filling material from ducks and geese to improve
Indian leather and textile export competitiveness.
In addition, the allocation of the budget for the National Technical Textiles Mission rose by
120.59%, from INR 175 crore in 2023-24 to INR 375 crore this FY.
Technical textiles are special textile fabrics designed for performance and functionality. They
are primarily used in healthcare, construction, agriculture, automotive, aviation, home care,
and protective gear.
These textiles can be made from both natural and synthetic fibers, like Spandex, Twaron,
Nomex, and Kevlar.
As of 2023, India exports approximately $2.5 billion worth of technical textiles, with medical
apparel being the most exported. India aims to increase this number to $10 billion in the next
five years.
Furthermore, the budget allocated for the National Handicraft Development Programme is
INR 236 crore, a significant 38% jump from the previous financial year’s INR 171 crore.
The budget for silk promotion has been raised to INR 900 crore, up from INR 875 crore.
Currently, India ranks as the world’s second-largest silk producer. The silk industry, or
sericulture, employs about 9.2 million people in rural and semi-urban areas. Despite this,
India imports silk due to high domestic demand.
Funding for centrally sponsored schemes has surged by 45.6% to INR 3,866 crore from INR
2,654 crore in 2023-24. This increase supports the promotion of geotextiles in the North-East,
PM-MITRA, handloom protection, and raw material supply.
Key Highlights of the Budget 2024 – 25
- The standard deduction for salaried individuals has been raised from INR 50000 to
INR 75000. - For pensioners, the deduction on family pension has been increased to 25000 from
INR 15000. - As a result of the new tax structure, salaried individuals can save up to INR 17500 in
taxes. - TDS rates on specified payments have been reduced to facilitate business and improve
taxpayer compliance. - The Angel tax provisions of Section 56(2)(viii) have been proposed to be removed.
- There will be a reduction of corporate tax on foreign companies from 40% to 35%.
- The Securities Transaction Tax (STT) on futures has been raised from 0.0125% to
0.02%, and the STT on options has been increased from 0.0625% to 0.1%. - Custom Duties have been reduced and exempted for critical goods like Mobile
phones, mobile PCBA and chargers, Gold, Silver, and Platinum, fish feed, alkaline
earth metals, and capital goods for manufacturing solar and cancer medications. - SIDBI will open 24 new branches to support and serve MSME clusters.
- A budget of INR 2.66 lac crore is allocated for rural development.
- Andhra Pradesh will receive special financial support for the Amravati project, and
Bihar will receive support for the airport, medical facilities, and sports infrastructural
development. - Over INR 3L crore is allocated for women empowerment, girl child education, and
women development. - Three new schemes have been implemented for ‘Employee Linked Incentive’, and a
new skilling scheme will be introduced for 20 lakh youth, where they will be skilled
over a 5-year period.
Read the complete Budget 2024 highlights and key takeaways here.For more articles on fabric suppliers, textile manufacturers in India, and the textile industry,
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