| Date: |
23-03-2011 |
| Subject: |
Hosiery Prices Rise By 60% |
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Garment manufacturers expressed dismay at the meagre 1.5% reduction in excise duty announced by Union finance minister Pranab Mukherjee on Tuesday. Meanwhile, the cost of readymade garments has spiralled in retail markets with hosiery prices rising by up to 60%.
Lakhs of workers, sweatshop owners and industrialists have been protesting against the imposition of a 10% excise on branded garments in this year's Union Budget. However, the finance ministry has rejected a rollback, instead granting only a 1.5% rebate despite mass protests and high-powered representations made by industry leaders since March 1.
"Reducing the excise duty by 1.5% is no relief. We will spend as much money on extra paper work and on hiring excise consultants. Exorbitant excise will only prompt garment manufacturers to remove the 'Made In India' label and go unbranded to avoid taxation," said Viren Shah, president, Federation of Retail Traders Welfare Association (FRTWA).
A quick check of mainstream shopping markets in Mumbai on Tuesday showed how retail prices have shot up in the past two months. "Cotton saris that were available for Rs 150 in January are selling for Rs 200, a hike of around 30%. Moreover, quality is poor as manufacturers are being forced to use cheap material to cover losses," said Raju Luthria, the owner of a store in Dadar.
He predicted that prices will rise further in April as the wedding season nears. "Manufacturers are shouldering part of the burden as sales volumes are low in March. April could see rates rise by 20%," Luthria said.
"Retail prices of hosiery have risen in the past year due to the rise in the cost of cotton yarn. Excise will be the last straw on the camel's back," said K B Agarwal, managing director of an innerwear manufacturing firm.
Agarwal's fear has become a reality in places like Surat. Luthria said many small factories had shut shop in the past year.
Many garment manufacturers are unhappy with the meagre 1.5% cut in excise duty.
Source : timesofindia.indiatimes.com
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