HIGHLIGHTS OF UNION BUDGET 2021-22

 

HIGHLIGHTS OF UNION BUDGET 2021-22

The Union’s Minister of Finance Nirmala Sitharaman, in an effort to boost the textile industry, proposed the Mega Investment Textile Region and Apparel Park (MITRA), a world-class institution building program when presenting the Union’s 2021-22 Budget.

At least seven cloth parks will be built over the next three years under Atmanirbhar Bharat Abhiyan to help create jobs.

Here are highlights of Union Budget for Textile Industry 2021-22:

1.   1. Clean air, renewable energy

To tackle the burgeoning problem of air pollution, the FM has proposed to provide an amount of

Rs 2,217 crore for 42 urban centres with a million-plus population in this budget. To give a further boost to the non-conventional energy sector, an additional capital infusion of Rs 1000 crore to Solar Energy Corporation of India, and Rs 1500 crore to Indian Renewable Energy Development Agency, has been proposed. Textile and apparel industry being in forefront of exploring renewable energy, would be benefitted from the scheme apart from other sectors.

2. MITRA Scheme to promote textile export potential

In the budget, the FM has finally given the official stamp of approval to the scheme of Mega Investment Textiles Parks (MITRA). This scheme will aim to create world class infrastructure with plug and play facilities to enable creation of global champions in exports. Under the scheme, seven mega textile parks will be established over three years.

3. Roads, highways, railway infrastructure for efficient logistics

During the lockdown, the geotextile companies in India were running at above capacity. These companies will continue to grow at a robust pace, as the government continues to focus on creating road infrastructure across the country. Under the Bharatmala Pariyojana project, 13000 km length of roads has already been awarded, of which 3800 kms have been constructed. By March 2022, the government will award another 8500 kms and complete an additional 11000 kms of national highway corridors.

The FM has afforded the highest ever allocation to the Ministry of Road Transport and Highways – Rs 1,18,101 crore, of which Rs 1,08,230 crore is for capital expenditure. Good road and rail connectivity and network will help bring down logistics costs for industries.Indian Railways have prepared a National Rail Plan for India – 2030. The Plan is to create a ‘future ready’ Railway system by 2030. “Bringing down the logistic costs for our industry is at the core of our strategy to enable ‘Make in India’. It is expected that Western Dedicated Freight Corridor (DFC) and Eastern DFC will be commissioned by June 2022,” the FM announced.

4. Strengthening small companies, start-ups, innovators

The FM has proposed to revise the definition under the Companies Act, 2013 for Small Companies by increasing their thresholds for paid-up capital from “not exceeding Rs 50 lakh” to “not exceeding Rs 2 crore” and turnover from “not exceeding Rs 2 Crore” to “not exceeding Rs 20 Crore”. This will benefit more than two lakh companies in easing their compliance requirements. As a further measure which directly benefits start-ups and innovators, the FM has proposed to incentivise the incorporation of One Person Companies (OPCs) by allowing it to grow without any restrictions on paid-up capital, turnover and their conversion into any other type of company at any time, reducing the residency limit for an Indian citizen to set up an OPC from 182 days to 120 days and also allow Non-Resident Indians (NRIs) to incorporate OPCs in India.

5. Incentives for start-ups

In order to incentivise start-ups in the country, the FM has proposed extending the eligibility for claiming tax holiday for start-ups by one more year – till 31st March 2022.

6.   6. Agri infrastructure

The FM has enhanced the allocation to the Rural Infrastructure Development Fund from Rs 30,000 crore to Rs 40,000 crore. The Micro Irrigation Fund, with a corpus of Rs 5,000 crore has been created under NABARD. The FM has proposed to double it by augmenting it by another Rs 5,000 crore. These, along with other agricultural reforms, could boost India’s cotton production. 

7. Migrant workers

The lockdown highlighted the plight of migrant workers across the country. The FM, in this budget, has proposed to launch a portal that will collect relevant information on gig, building, and construction-workers among others. This will help formulate health, housing, skill, insurance, credit, and food schemes for migrant workers. “We will conclude a process that began 20 years ago, with the implementation of the four labour codes. For the first time globally, social security benefits will extend to gig and platform workers.

Minimum wages will apply to all categories of workers, and they will all be covered by the Employees State Insurance Corporation. Women will be allowed to work in all categories and also in the night shifts with adequate protection. At the same time, compliance burden on employers will be reduced with single registration and licensing, and online returns,” she said.

8. Affordable rental housing for migrant workers

“We are committed to promote supply of Affordable Rental Housing for migrant workers. For this, I propose to allow tax exemption for notified Affordable Rental Housing Projects,” the FM announced.

9. Custom duty rationalisation

Since last year, the government has eliminated 80 outdated customs duty exemptions. This year, the government plans to review more than 400 old exemptions. “We will conduct this through extensive consultations, and from 1st October 2021, we will put in place a revised customs duty structure, free of distortions. I also propose that any new customs duty exemption henceforth will have validity up to the 31st March following two years from the date of its issue,” FM Sitharaman announced.

Source - Textile Excellence