After a brief lull in the agitation over excise duty on ready made items announced by the Union finance minister in the Budget, the stir seems to be on the rise once again.
Disappointed with Pranab Mukherjee's announcement in Parliament regarding an amendment in the duty, which they call an eyewash, the traders from Ludhiana have written to Prime Minister Manmohan Singh, seeking his help. They have also threatened to go for an indefinite bandh from Thursday.
Shocked by the FM's announcement, the traders said the change was only cosmetic.
Members of Chamber of Knitwear and Textile Associations of Ludhiana said excise duty was a tax on manufacturer and not retailer. ''Hence, the reference to maximum retail price in context of exemptions and tax rate was misleading. It is beyond our understanding as to why the minister has referred to MRP in his speech. The industry is hurt by this treatment by the government and outrightly rejects the relief ''supposedly'' given by the minister,'' the members added.
On behalf of the industrialists, association president Ajit Lakra said more than 80 per cent garment industry was still in the unorganized segment and its units were fragmented and decentralized.
''In 2004, while removing excise duty, the then finance minister P Chidambaram had clearly stated in his Budget speech that he was doing it as the industry is ''fragmented and decentralized'','' Lakra said. He added that the players were not equipped to handle complex excise rules and regulations.
The traders also expressed resentment over the fact that in the last one year prices of raw cotton had gone up by 150 per cent, yarn by 100 per cent and other inputs like elastic, sewing thread and labour had all spiralled, putting immense pressure on the industry. ''Margins on low-end brands are very low and the consumer is highly price sensitive... a small hike leads to lower consumption,'' the industrial said.