Union Budget: Leather, footwear industries feel left out

AGRA: Members of Agra's leather and Firozabad's glass industries said that they have been "completely left out" by finance minister Arun Jaitley, who presented the Union Budget on Thursday. Both small and big traders claimed that after being hit by demonetization and 18% GST, they were looking for some relief from the central government in this year's budget.

Shoe and glass exporters said that barring some big corporates and farmers, no one will benefit from the budget. Nothing has been done for small businesses, they said. President of Agra Shoe Factors Association, Gaagan Das Ramani told TOI, "We were hoping to get some relief for the leather industry but that hasn't happened. The association members were demanding an increase in the annual turnover audit limit from Rs 1.5 crore to 2 crore, besides a hike in investment exemption limit from Rs 1.5 lakh to Rs 2 lakh."

Ramani said that they are now hoping that in the next GST Council meeting, the government will reduce the tax rate to 5% for footwear up to Rs 1000 and 12% for footwear costing more.

Nazir Ahmad, chairman of Park Export and former president of Agra Footwear Manufacturer Exporters Chamber (AFMEC), also expressed similar views. He said, "We were expecting GST refund to be simplified. By saying that footwear industry will get all facilities will not solve our problems."

However, Puran Davar, president of Agra footwear industry, said that 30% income tax allowance on new employment will reduce the labour cost and enhance transparency in employment. "It will also enhance competiveness," he said.

Hanuman Parsad Garg, chairperson of Firozabad Glass Industrial Syndicate, said, "The Union Budget has brought no relief to the 10 lakh men and women who are directly or indirectly associated with glass and bangle industries here. We were expecting at least a change in tax slab and easy access to loans."
"After demonetization and GST, the bangle industry had reported a 30 % dip in overall business. That's because the production cost increased and customers shifted to metal and plastic bangles which are far cheaper than glass bangles," added Garg. He said that before GST, they were paying 5 % tax on raw material and a set of glass bangles would cost Rs 30-40. "But now, after 18% GST, our production cost has risen to a whopping Rs 100 for the same set of bangles. The process doesn't end here. These bangles are then decorated with various kinds of design work using artificial stones or with gold and silver metal work. By the time the finished product comes to the retail market, a set of dozen bangles costs Rs 500-Rs 3000," he said.

"If the government still does not understand our problem, the glass industry will completely vanish in the next two decades. There is no other state in the country that is engaged in glass products," said Garg.
Rajkumar Mittal, chairperson of Uttar Pradesh Glass Manufacturer Association, said, "The government has in fact raised the cess on our industry by 1%. In the entire budget, there was no mention of the glass industry. Competition from ceramic products will kill the glass industry. On two occasions, chief minister
Yogi Adityanath and Prime Minister Narendra Modi have visited Firozabad and assured us assistance, but none of that was reflected in the budget."

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