15 March,2011 06:58 AM IST | | Bobby Anthony
Retailers say they have no other choice but to pass on burden of additional 10 per cent excise duty proposed in Union Budget 2011-12 on to the consumer
If the proposal in Union Budget 2011-2012, to levy a ten per cent excise becomes law, retailers say that they would have no choice, other than passing on the hike to their consumers, who would eventually end up paying more for kapda too especially at a time when they are already burdened with higher prices for roti, in terms of almost double digit food inflation, as well as affordable makaan, which is as good as a pipedream.
Garment manufacturers called for a meeting at Dadar in protest of the proposed imposition of a 10 per cent excise duty on garments as announced in the Budget
"If consumers don't want to pay more for branded apparel, then they must get ready to wear cheap imported stuff from China, Lanka, Vietnam and even Bangladesh, which retailers will be forced to stock. In any case, at a total 15 per cent import duty, such imports will now become cheap.
Such cheap imports will kill Indian industry. So consumers may have to bid goodbye to their favourite Indian brands. Even if Indian brands survive, they too will be forced to manufacture at cheaper costs in Bangladesh or China. Retailers may survive, but what about labourers?
The ten per cent excise duty will effectively take away their roti, which they earn only when kapda they make is sold," Viren Shah, proprietor of garment shop Roopam, who also happens to be president of the Federation of Retail Traders' Welfare Association and Vice Chairman of the Confederation of All India Traders, told MiD DAY.
According to figures compiled by the Federation of Readymade Garments Association (FORGA), "Even a 25 per cent de-growth in this industry could mean that at nearly six to seven lakh jobs" would be lost.
"Excise is applicable to the entire population irrespective of whether consumers are rich, middle class or poor. In other words, the common man will be as badly affected as the elite.
Besides, the tax is completely unnecessary with the general sales sax (GST) which is expected to come into effect from next year," said a FORGA spokesperson.
Largest work force
The readymade garment industry is one of the largest industries in India and second largest employment generator after agriculture, with several lakhs involved in garment manufacturing to retailing.
Majority of these garments are made in small units, which come under the unorganised sector, with the organised sector accounting for hardly 15 per cent to 20 per cent of the entire domestic market.
