With the ‘mantra’ of ‘Sabka Saath, Sabka Vikas, and Sabka Vishwas’ and the whole of nation approach of “Sabka Prayas”, the Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman presented the Interim Union Budget 2024-25 in Parliament, today. The key highlights of the Budget are as follows:
Part A
Social Justice
‘Garib Kalyan, Desh ka Kalyan’
Welfare of ‘Annadata’
Momentum for Nari Shakti
PM Awas Yojana (Grameen)
Rooftop solarization and muft bijli
Ayushman Bharat
Agriculture and food processing
Research and Innovation for catalyzing growth, employment and development
Infrastructure
Railways
Aviation Sector
Green Energy
Tourism sector
Investments
Reforms in the States for ‘Viksit Bharat’
Revised Estimates (RE) 2023-24
Budget Estimates 2024-25
Part B
Direct taxes
Indirect taxes
Tax rationalization efforts over the years
Achievements in tax-payer services
Economy-then and now
Source : PIB
The Union Cabinet chaired by Prime Minister Shri Narendra Modi approved the continuation of Scheme for Rebate of State and Central Taxes and Levies (RoSCTL) for export of Apparel/Garments and Made ups upto 31st March 2026.
Continuation of Scheme for proposed duration of two (2) years will provide stable policy regime which is essential for long term trade planning, more so in the textiles sector where orders can be placed in advance for long term delivery.
The continuation of RoSCTL will ensure predictability and stability in policy regime, help remove the burden of taxes and levies and provide level playing field on the principle that “goods are exported and not domestic taxes”
The Union Cabinet had given approval of the scheme up to 31.03.2020 and further approval was given for continuation of RoSCTL till 31st March 2024. The present extension upto 31st March 2026 helps in enhancing export competitiveness of garments and made-ups sectors. It makes apparel/garments and Made ups products cost-competitive and adopt the principle of zero-rated export. The other textile products (excluding Chapter 61, 62 and 63) not covered under the RoSCTL, are eligible to avail the benefits under RoDTEP along with other products.
The objective of the scheme is to compensate for the State and Central Taxes and Levies in addition to the Duty Drawback Scheme on export of apparel/ garments and Made-ups by way of rebate. It is based on an internationally acceptable principle that taxes and duties should not be exported, to enable a level playing field in the international market for exports. Hence, not only indirect taxes on inputs are to be rebated or reimbursed but also other un-refunded State & Central taxes and levies are to be rebated.
Rebate of State Taxes and Levies comprises VAT on fuel used in transportation, captive power, farm sector, mandi tax, duty of electricity, stamp duty on export documents, embedded SGST paid on inputs such as pesticides, fertilizers etc. used in production of raw cotton, purchases from unregistered dealers, coal used in production of electricity and inputs for transport sector. Rebate of Central Taxes and Levies comprises central excise duty on fuel used in transportation, embedded CGST paid on inputs such as pesticides, fertilizer etc. used in production of raw cotton, purchases from unregistered dealers, inputs for transport sector and embedded CGST and Compensation Cess on coal used in production of electricity.
RoSCTL has been an important policy measure and has helped in enhancing competitiveness of Indian exports of apparel and made ups which are value added and labour intensive segments of the Textile Value Chain. Continuation of Scheme for further duration of two (2) years will provide stable policy regime which is essential for long term trade planning, more so in the textiles sector where orders can be placed in advance for long term delivery.
Source :PIB
The textile and apparel industry, while welcoming extension of the Rebate of State and Central Taxes and Levies (RoSCTL) scheme for two years, has expressed disappointment over unchanged Import Duties.
Cotton Textiles Export Promotion Council chairman Sunil Patwari said continuation of the RoSCTL was essential for the long-term trade planning. Orders could be placed in advance for long-term delivery.
The scheme has seen an increased allocation from ₹8,404.66 crore last year to ₹9,246 crore in the budget this year. Apparel Export Promotion Council chairman Sudhir Sekhri said continuation of the RoSCTL for export of garments and apparel till the end of March 31, 2026 would give the much needed relief to the industry as the traditional markets of the US and the EU were under stress. The Confederation of Indian Textile Industry (CITI) chairman Rakesh Mehra said there was no major policy announcement in the interim budget. “The industry needs immediate relief from the financial stress, especially in the spinning sector.” The total budget allocation for textiles has increased by 27.6 %, largely due to the allocation of ₹600 crore for Cotton Corporation of India towards the cotton MSP operations. Cotton procurement by CCI should be revamped as per policies recommended by user industry associations to ensure price stability and discourage speculative trading.The allocation for RoSCTL and RoDTEP had increased by 10% and 5.8% respectively, which was modest. The industry was trying to enhance export performance and expects better allocations for trade promotion in the full budget to be announced after the elections, he said.
S.K. Sundararaman, chairman of the Southern India Mills’ Association, said the demands of the textile industry relating to the raw material issues and a few other industry demands should be considered in the full-fledged budget. He welcomed the announcement of measures to encourage green power, including bio-manufacturing, roof top solar and offshore wind to reduce the carbon footprint and the initiatives to prepare the country for meeting the sustainability goals. According to Sanjay Jain, former chairman of Textile Sector Skill Council, the budget does not offer any major supportive measure to the industry. It did not remove the Import Duty on cotton and or changed the duty on fabric imports, he said.
Tiruppur Exporters Association president K.M. Subramanian said the budget had no announcement related to the textile sector and “We hope there will be supportive measures in the final budget.” The PTA Users Association general secretary R.K. Vij said it expected corrective changes in Customs Duty for fabrics. However, at least in the full budget the government should make the necessary changes along with rationalisation of the GST rates for manmade fibre sector.
Source: The Hindu
Synopsis Commerce and Industry Minister Piyush Goyal stated that global economic uncertainties have impacted foreign direct investment (FDI), but India will continue to be a bright spot for overseas players. Goyal emphasized that when signing free trade agreements (FTAs) or bilateral investment treaties (BITs), the government ensures that the terms are favorable for India. The global economic uncertainties have impacted foreign direct investment (FDI) but despite these challenges, India will continue to be the bright spot of the world for overseas players, says Commerce and Industry Minister Piyush Goyal. While signing free trade agreements (FTAs) or bilateral investmenttreaties (BITs), the government always ensures the terms are best for India, Goyal told PTI in a post-budget interaction. Finance Minister Nirmala Sitharaman in her budget speech on Thursday said India is negotiating BITs with different countries inShe said that geopolitically, global affairs are becoming more complex and challenging with wars and conflicts the spirit of 'first develop India. "The global uncertainty has certainly impacted FDI, particularly considering that the interest rates in the US and other developed countries have massively seen a spike," Goyal told PTI. He said that because of the high interest rates, there was a reverse flow of capital towards developed economies, "but I do believe" the fact that India is an oasis of stability. India's aspirational population and other enablers are giving "us the confidence that despite all these adversities, India will continue to grow, India will continue to be the bright spot of the world," the minister said. When asked about the impact of the proposal to extend tax incentives for startups, Goyal said the effort is to encourage startup ecosystem of the country. On the finance minister's decision not to tinker with the tax or import duties, Goyal said:"It is proper that she has kept away from the temptation to give sops or provide any tinkering with the rates". Sitharaman said that as for tax proposals "I do not" propose to make any changes relating to taxation and propose to retain the same tax rates for direct taxes and indirect taxes including import duties.
Source : Economic Times
The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, today has given its approval for signing and ratification of Bilateral Investment Treaty between the Government of the Republic of India and the Government of the United Arab Emirates. The Treaty is expected to improve the confidence of the investors, especially large investors, resulting in an increase in Foreign Investments and Overseas Direct Investment (ODI) opportunities and this may have a positive impact on employment generation. The approval is expected to increase investments in India and is likely to help in realizing the goal of Atmanirbhar Bharat by encouraging domestic manufacturing, reducing import dependence, increasing exports etc.
Source : PIB
Synopsis India sustains export growth despite global challenges arising from conflicts like the Israel-Hamas war. The Budget lays a strong foundation for economic growth. Geopolitical complexities and conflicts reshape globalization. Wars and crises disrupt global supply chains, impacting India's exports and logistics. The Budget focuses on every section of society, with announcements on e-mobility promotion and increased infrastructure spending, providing more opportunities for business and domestic industry. Finance Minister Sitharaman's priority is economic policies that foster growth and contribute to India becoming a developed country by 2047. India has sustained its export growth notwithstanding the global challenges emerging due to issues like the IsraelHamas war and the Budget has laid out a strong foundation to push the economic growth, Commerce and Industry Minister Piyush Goyal said on Thursday. The minister said that certainly, the country is facing "very severe" challenges due to these conflicts. But despite these challenges, India continues to be a bright spot in terms of economy, economic growth, and we continue to broadly sustained our exports...I think, the Indian story is a story of resilience, and strength," Goyal told PTI in a post-budget interaction. In her budget speech, Finance Minister Nirmala Sitharaman stated that geopolitically, global affairs are becoming more complex and challenging due to wars and conflicts. "Globalization is being redefined with reshoring and friend-shoring, disruption and fragmentation of supply chains, and competition for critical minerals and technologies. A new world order is emerging after the Covid pandemic," Sitharaman said. The Russia-Ukraine war, the Isreal-Hamas conflict and the Red Sea crisis have disrupted the global supply chains. Red Sea is the busiest trade route as it accounts for 30 per cent of global container traffic and 12 per cent of global trade. Goyal said due to these challenges the growth potential on the trade front that we had is "slowing very significantly and showing weakness". He added that due to these wars and crises, "our logistics, our shipment lines, out of India for exports" are getting impacted significantly. India's exports rose by only 1 per cent to USD 38.45 billion in December 2023 while the trade deficit narrowed to a three-month low of USD 19.8 billion, according to the government data. Exports during April-December this fiscal dipped by 5.7 per cent to USD 317.12 billion. Imports contracted by 7.93 per cent to USD 505.15 billion, leaving a trade deficit of USD 188.02 billion in the first three quarters as against USD 212.34 billion in April-December 2022. Welcoming the budget proposals, Goyal said that the Budget has focused on every section of the society. Announcements pertaining to e-mobility promotion and increase in infrastructure spending will provide "more and more" opportunities for business and domestic industry, Goyal stated. "Every infrastructure project means greater degree of sale of goods, steel, cement, furnishing. It touches so many different segments of industry," Goyal said. "When we talk about greater exports and greater economic activity, people get opportunities in services, logistics, the transportation sector gets a leg up," the minister said. He said that the Budget has laid out a strong foundation to push the country's economic growth. Sitharaman announced a Rs 11.11 lakh crore spending on infrastructure and vowed to continue reforms as she resisted resorting to populist measures in Modi government's last Budget before general elections, instead choosing to stay on the path of cutting deficit while bolstering measures for focus groups. Giving a sneak preview of what will be the Modi government's priority in the third term, if re-elected, she said economic policies that foster and sustain growth, facilitate inclusive development and contribute to generation of resources to power investments will be adopted towards making India a developed country by 2047. "The next five years will be years of unprecedented development and golden moments to realise the dream of developed India by 2047," she said.
Source: Economic Times
Synopsis India is negotiating bilateral investment treaties with different countries with a view to promote foreign inflows, Finance Minister Nirmala Sitharaman said on Thursday. She said that foreign direct investment (FDI) has doubled during 2014-23 to USD 596 billion compared to the inflow received during 2005-14. India is negotiating bilateral investment treaties with different countries with a view to promote foreign inflows, Finance Minister Nirmala Sitharaman said on Thursday. She said that foreign direct investment (FDI) has doubled during 2014-23 to USD 596 billion compared to the inflow received during 2005-14. "For encouraging sustained foreign investment, we are negotiating bilateral investment treaties with our foreign partners, in the spirit of 'first develop India'," she said while presenting the interim Budget 2024-25. India is negotiating this treaty with countries such as the UK. These investment treaties help in promoting and protecting investments in each other's countries. These pacts are important as India has earlier lost two international arbitration cases against British telecom giant Vodafone and Cairn Energy plc of the UK over the retrospective levy of taxes. Foreign direct investment (FDI) equity inflows in India declined 24 per cent to USD 20.48 billion in April-September 2023, according to government data. The total FDI -- which includes equity inflows, reinvested earnings and other capital -- contracted 15.5 per cent to USD 32.9 billion during the period under review against USD 38.94 billion in April-June 2022. The top investor countries include Singapore, Mauritius, the US, the UK, and the UAE. Computer software and hardware, trading, services, telecommunication, automobile, pharma and chemicals are some of the key sectors that attract FDI into India. An official had earlier said that hardening interest rates globally and worsening geopolitical situation impacted FDI inflows into India in 2022-23.
Source: Economic Times
Synopsis Piyush Goyal discusses bilateral investment treaties and the importance of negotiating from a position of strength. He mentions concerns about the Red Sea situation and the potential impact on exports. Goyal believes that India will become the largest market for aircraft in the next 20-25 years, attracting manufacturers. The budget focuses on infrastructure investment to stimulate growth and boost multiple industries. The PLI scheme is expanding, with new sectors to be included based on their gestation period. The interim budget eschews populism as it is not election-driven because the government prioritises national wellbeing, minister for commerce and industry, consumer affairs, food and public distribution and textiles Piyush Goyal told Shambhavi Anand in an interview. Edited excerpts:
Talks are going on with many countries on different levels at different times. Many BITs were cancelled in 2016 so many of them are talking. Many of them don't even want the BITs in their original form because it has become passe. For example, many countries don't like investor - state dispute settlement (ISDS). Many countries don't like to include tax. For example, if you take the UK, as much money has been invested in India, we have also invested equally. Our investments in the UK are steep. The difference is that there was a time when India used to negotiate from a position of weakness. People would dictate terms to India. We would do things under pressure. Some of the deals signed in the past, are really detrimental to India. Our imports from those countries have gone up and our exports haven't gone up at all. They were not done with any great stakeholder consultation like we do. Our style is that whatever we'll do, we'll do it with great confidence that what we are doing is for the good of India. FTAs, BITs will be from a position of strength and confidence.
How worrying is the Red Sea situation? We are concerned that shipments are getting delayed; also getting more expensive if it goes on for longer. It's a matter of concern. We were hopeful that it would get resolved but it seems to be pulling longer, otherwise the exports would have again returned to growth. Many governments, including India, are taking precautionary measures to safeguard free flow of vessels and to attack or protect from this type of activities. But the jury's still out. We don't know exactly.
The FM said expansion of existing airports and development of new airports will continue expeditiously as Indian carriers have collectively ordered over 1000 new aircraft. What do you think? My sense is that in the next 20-25 years, India will be the largest market for aircraft. There are several manufacturers who want to locate in India. What has the budget done to spur growth? Our goal is that every decision taken is in the interests of India. Look at the investment made in infrastructure, for the second time in a row. Money spent on infrastructure has a transformational impact on people's lives as it gives a boost to several industries such as steel, cement, furnishing, tiles and marbles. Today capacity utilisation in steel is around 90%. I am from the steel industry. It's like a dream. With better infrastructure, logistics costs come down. Then you become more competitive. There's more demand for goods and services. There has been an increase in the outlay for PLIs. Are there any new sectors for which the PLI scheme will be launched? Don't look at the outlay. This will increase in leaps and bounds. See every industry has a gestation period. Those PLI schemes just started four years back. Electronics and all where the gestation period is small, they have come into operations, but like textile PLI, auto component, steel - they have longer gestation period. So, as these will come into operation, then this will grow by leaps and bounds and if all this gets used up and more is required, we will provide more.
Source : Economic Times
Synopsis HSBC India Manufacturing Purchasing Managers' Index rose to a four-month high of 56.5 in January, recovering from the previous month's 18-month low of 54.9. The rise in production was driven by robust domestic demand, with current output expanding and domestic orders growing faster than export orders. HSBC India Manufacturing Purchasing Managers’ Index rose to a four-month of 56.5, recovering from an 18-month low of 54.9 hit in the previous month, buoyed by domestic demand, according to results of a private survey released Thursday.
Goods producers reported stronger demand from clients spread across Africa, Asia, Australia, Europe, the Middle East and the Americas. Collectively, the rate of expansion in international orders was the fastest since last October, the report noted The rise in production, however, did not encourage manufacturers to add to significantly to employment, as firms reported no change in payroll numbers. “The rate of accumulation was sharp and one of the strongest in the near 19- year survey history,” the report pointed out. On the inflation front, input costs rose at the fastest pace in three months, with output or charge inflation also rising to a three-month high. “The input price index inched up, but manufacturers were able to pass on some of the cost pressures to consumers, as suggested by the small rise in the output price index," Lam noted. The rise in input prices was still moderate compared with the long-run average, which bodes well for core inflation. India’s core inflation declined below 4% for the first time in 48-months in December, giving more support for the Reserve Bank of India to cut rates in the later part of the year. Better manufacturing data is likely to provide support for Reserve Bank of India’s monetary policy committee to hold rates in its meeting scheduled in February. The finance ministry in its review earlier this week projected that Indian economy may grow close to 7% in the coming fiscal as well. Economists are pencilling in a 25 percentage point rate cut in June or August meeting. “New product enquiries and diversification, alongside demand strength and publicity, boosted business confidence in January. Panellists were at their most upbeat towards the year-ahead outlook for output in 13 months,” the report said.
Source: Economic Times
The National Council of Textile Organisations (NCTO) has welcomed a plan from the US Administration to crackdown on "unfair trade practices" which it says are responsible for the closure of eight production plants in the last three months. ecretary of US Homeland Security Alejandro N Majorkas has committed to a 30-day immediate textile enforcement action plan to tackle unfair trade practices and ensure the country’s domestic sector “is here long into the future”.
The NCTO says it is looking forward to working actively with the US administration on the details of the plan and ensuring it meets all critical objectives for enforcement and deterrence of the Uyghur forced labour and de minimis loophole.
NCTO explained the critical issues shared with the secretary during a recent meeting included:
Secretary Majorkas told attendees at the virtual meeting that he will enlist US Customs and Border Protection (CBP), Homeland Security Investigations (HSI) and other agencies to increase their work in prosecuting illegal customs practices. CBP said it had already stepped up its enforcement work in this area, including with physical inspections, testing and analysis at its laboratories, verification visits and audits. CBP is also increasing its capacity for isotropic testing of imported apparel goods suspected of violating the UFLPA.
Source : Just Style
France's economy showed no growth in the fourth quarter (Q4) of 2023, maintaining the same level of activity as in the previous quarter, according to the National Institute of Statistics and Economic Studies (INSEE). The country's gross domestic product (GDP) remained stable in volume terms, marking a period of economic stagnation after a series of fluctuating quarters.
The final domestic demand, excluding inventories, had a negative impact on the GDP growth for this quarter, contributing negatively by 0.1 points following a modest gain of 0.4 points in Q3 2023. This downturn was primarily due to a significant decrease in gross fixed capital formation (GFCF), which fell by 0.7 per cent after a slight increase of 0.2 per cent in the preceding quarter.Foreign trade recovered in Q4 2023 positively contributed 1.2 points to GDP growth, a notable improvement from the 0.1 points in the previous quarter. This positive development was driven by a sharp decline in imports by 3.1 per cent, contrasted with a relatively stable export level, which saw a marginal increase of 0.1 per cent after a 0.6 per cent rise in Q3, as per INSEE. The contribution of inventory changes to GDP growth remained negative, marking a 1.1 points deduction after a 0.3 points deduction in Q3 2023. France's economy saw an annual increase of 0.9 per cent in 2023, a significant slowdown from the 2.5 per cent growth in 2022 and the 6.4 per cent surge in 2021. This yearly growth was predominantly buoyed by a sharp increase in the Q2 2023, while economic activity remained mostly unchanged throughout the remaining year. As 2023 drew to a close, the growth overhang for 2024 was pegged at a modest 0.1 per cent.
Source: Fibre2fashion
The Economic Confidence Index in Turkiye witnessed a remarkable upswing in January 2024, reaching 99.4, marking a significant increase from the previous month's 96.4. This surge reflects a robust 3.1 per cent rise in economic confidence, highlighting Turkiye's positive economic outlook, as per the Turkish Statistical Institute (Turkstat). Breaking it down further, the consumer confidence index also saw a substantial boost, rising by 3.9 per cent to attain a value of 80.4. In contrast, the real sector (manufacturing industry) confidence index experienced a modest decline of 0.5 per cent, settling at 102.9. Meanwhile, the retail trade confidence index decreased by 1.0 per cent, reaching a value of 115.6 in January when compared to the previous month, Turkstat said in a press release.
Source : Fibre2fashion
