Feedback
A pioneer B2B media and publication platform connecting with Fashion Brands & Retail in India
 

CMAI’s pre-budget recommendations highlights need for more policy support

 

CMAI conducts survey on its members ability to pay wages

 

The Clothing Manufacturers Association of India, (CMAI) has written an open letter to Nirmala Sitharaman, Minister of Finance outlining pre-Budget recommendations. The association has urged the government to consider key financial aid that can help the industry recover from the aftermath of the Covid-19 pandemic.

Government support for MSME sector

The letter states how the Indian garment industry, whose manufacturing is solely dependent on retail, is the worst affected, in view of the stringent lockdowns, partial lockdowns, and an on off approach to markets being allowed to operate. What compounds the problem is the fact that more than 80 per cent of the garment industry is within the MSME sector, with its own constraints of finance and sustaining power.

Rajesh Masand, President, CMAI, explains it is therefore, essential that the garment manufacturing sector, which is the highest employer in the country after agriculture, gets strong support from the government if it has to survive and recover in coming years. The upcoming Budget for 2021-22 is an ideal opportunity for the government to extend this support to the MSME sector in this crucial industry. Support to this industry will also add tremendous fillip to the ‘Atmanirbhar Bharat’ philosophy of the government.

CMAI, also states how in the financial year 20-21, many companies will face a drastic drop in revenue and profits and it would impact them financially. This would create a situation where banks might drastically curtail or withdraw credit facilities. Hence, CMAI recommends banks should continue giving Drawing Power (DP) based on 2019-20 performance, and not give weightage to the 2020-21 numbers. Furthermore, companies showing any ‘Loss’ return in Income Tax should be not an automatic candidate for scrutiny, as this year it is possible that many companies might incur heavy losses .

GST at 5%, better interest rates

Although retail sales have shown some signs of pick up, it is still struggling at around 60 to 65 per cent of last years’ sales. Consumers are yet to build sufficient confidence to resume normal shopping – especially when it comes to discretionary spending. Hence, the association has strongly recommended the current distinction in GST rates below and above Rs 1,000 is removed, and a uniform rate of 5 per cent GST is applied.

The association also recommended at least for a period of one year, domestic manufacturers are offered working capital interest rates at the same rate as exporters to provide a huge relief to the manufacturers.

The government is contemplating an outstanding PLI Scheme, which for the textile sector been converted to a FPLI Scheme. One of the qualifying criteria for this scheme is a current base turnover of Rs 100 crores. For the garment sector, and especially the domestic sector, there are only a miniscule number of manufacturers who would qualify for this criterion. To really give a massive push to the avowed objective of pushing MMF sector, the association strongly believes the minimum turnover criterion be reduced to Rs 50 crores, for this scheme to be effective.

LATEST TOP NEWS
  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10

India’s plan to change FDI rules may hit Amazon, Flipkart

India’s plan to change FDI rules may hit Amazon, Flipkart

     India is considering revising its foreign investment rules for e-commerce, a move that could compel players, including Amazon, to restructure their ties with some major sellers. The discussions coincide with... Read more

Lee, Wrangler to increase focus on online channels in India

Lee, Wrangler to increase focus on online channels in India

     Jeans brands Lee and Wrangler are planning to transform their India businesses into omni-channel entities. This is being done to drive growth and double sales over the next two years... Read more

Q2 apparel prices to remain soft, demand for cotton fabrics, home textiles to in…

Q2 apparel prices to remain soft, demand for cotton fabrics, home textiles to increase: Ind-Ra

    India Ratings and Research (Ind-Ra) in a report stated apparel prices are likely to remain soft in the second half of 2020-21 even as the segment is in a recovery... Read more

Shopping malls slowly recover as footfalls inch towards pre-Covid levels

Shopping malls slowly recover as footfalls inch towards pre-Covid levels

    Year 2020 was a tough one globally for people and businesses alike. With long stretches of lockdowns, and people confined at home, life almost came to a standstill. However, with... Read more

Decathlon to close down ‘country’s biggest sports store’ in Ahmedabad

Decathlon to close down ‘country’s biggest sports store’ in Ahmedabad

     Sports retail chain, Decathlon, plans to shut its Sardar Patel Ring Road store in Ahmedabad, launched seven years ago. This was “country’s biggest sports store” on January 15. “The operations... Read more

CMAI’s pre-budget recommendations highlights need for more policy support

CMAI’s pre-budget recommendations highlights need for more policy support

    The Clothing Manufacturers Association of India, (CMAI) has written an open letter to Nirmala Sitharaman, Minister of Finance outlining pre-Budget recommendations. The association has urged the government to consider key... Read more

Future Group expect sales to normalise by Jan-end

Future Group expect sales to normalise by Jan-end

     Almost a year after business was severely hit by pandemic-related disruptions; Future Group CEO Kishore Biyani expects normal sales to return by the end of January. The group, which operates... Read more

Pressure on rentals to continue post March 21

Pressure on rentals to continue post March 21

    The uncertainty around rental negotiations in FY22 continues, brands and retailers feel the support on rentals should continue as long as it is required, as they fear extension of Covid-induced... Read more

Popularity of Super Apps lead brands to align with more on them

Popularity of Super Apps lead brands to align with more on them

    Indeed the vaccine will give a boost to malls and retail stores and they can expect business to pick up once people are less apprehensive about crowded places. However, one... Read more

India’s e-tail business to grow despite competition from brick-and-mortar stores

India’s e-tail business to grow despite competition from brick-and-mortar stores

    Though reopening of the economy may bring shoppers back to stores, they will not completely abandon online shopping, says a Financial Express report. India’s e-retailing business is expected to grow... Read more

MOST POPULAR NEWS
Go to top

Follow Us On:

Face BookDealersForYou

TWDFUpublications

LNDFUpublications

YouTubeDFUpublications

 Copyright © 2020 DFU Publications. All rights reserved.