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Textiles to get fiscal sops

New Delhi, June 12: The government is considering fiscal relief measures for textile units, including service tax exemption and lower interest rates. The sector has been badly hit by the global recession.

“As part of a short-term strategy, the government will strive to rationalise the fiscal structure, exempt service tax, reduce interest rates on pre- and post-shipment credit and facilitate faster clearance of arrears on terminal excise duties and central sales tax,” Union textile minister Dayanidhi Maran today told an industry conference.

Textile exports declined around 2 per cent to $21.75 billion in 2008-09 as demand slumped in the US and the EU, which account for over 60 per cent of overseas sales.

According to the minister, the $52-billion labour-intensive industry needed more fiscal stimulus and would require investments of Rs 30,000 crore each year for the next five years to sustain an annual growth rate of 8-10 per cent.

“The government will impart momentum to the implementation of the technology upgradation fund scheme, plan for integrated textiles parks and the technology mission on cotton in the Eleventh Five Year Plan period,” he said.

The ministry will strive to create 10 million jobs in the sector, which provides direct employment to about 330 lakh people, Maran said.

However, a UN study has projected that about 1.3 million Indians engaged in exports are likely to lose their jobs in this financial year.

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