In an interview with moneycontrol.com, BG Jain, chairman and managing director of textile company Nakoda, spoke about his expectations from the upcoming Union Budget 2012-13.
Below is an edited transcript of his interview.
Q: How has the year 2011 been for the industry as a whole and also for your company in general?
A: The year 2011 has been just moderate so far as the Industry in general is concerned in the wake of repeated hikes in the lending rates, highly volatile exchange rate, choppy stock markets, rising petroleum prices and generally passive sentiment about Government sluggishness on implementation Industrial policies/reforms. The above factors coupled with Tsunami in Japan and looming financial crisis in the Euro Zone have depressed the Global markets which have also affected Indian industry. So far as Nakoda Ltd. is concerned, we have not only been able to keep our head above water but have improved overall performance compare to previous year. This is reflected in 59.74 % growth in sales and 49.08 % growth in net profit after tax.
Q: What you expect to hear in the Budget this time round specific to your sector?
A. Softening of interest rates would definitely be on the wish list of every industry. As regards our industry, which belongs to Petro-Chemical sector, we would certainly look forward to policies which tend to stabilise the prices of petroleum products. This is imperative in view of pressure from United States insisting on cutting down imports from Iran. Import duty on raw material must be brought down to 2%
Q: What about exports? Are you expecting any incentives to come through in the Budget?
A. Exporters did benefit from the depreciation of rupee versus dollar but high volatility in the exchange rate is a matter of concern both for importers and exporters. To maintain the competitive advantage in the global market it is desirable that the various incentives extended to the exporters may at least be maintained if not enhanced. As far as Nakoda. is concerned, we are not exporting any significant amount of our products.
Q: The one thing, which usually comes through, is some kind of allocation change under the TUF scheme. Do you expect anything major this time?
A: Though we are predominantly in the petro chemical space the texturising part in our Industry falls under the textile activity. To that extent TUF scheme is applicable in our case also. The Textile Industry has witnessed a phenomenal growth in terms of investment in the state-of-the-art technology, Upgradation of obsolete technology, expansion in the capacities followed by substantial growth in the exports of textile goods on the back of various incentives extended under TUF scheme. It may be relevant to mention that Textile Industry constitutes 17% of total exports from India, being next only to IT. Hence TUF scheme should be extended for further period of five years.