Textile sector sops have 3-year sunset clause: Eco Affairs Secy

The finance minister has said very clearly that the focus of the government will be on job creation. So, this is one specific initiative in follow up to that announcement. The entire focus is on job creation; garments were identified as a sector which has a huge potential for job creation. So, therefore this package of incentives has been announced to give a boost to garment sector.

Q: Just to understand what we should then prepare ourselves for as far as the new textile policy is concerned, I am given to understand it is being finalised by the Prime Minister’s Office at this point in time because clearly the stock markets have gotten excited about the possibility of more reforms, what can we realistically now expect from the new textile policy?

A: I will not be able to spell out specifics till the government takes a decision and announces it. However, I can tell you that the pace of policy initiatives, the pace of various kinds of reforms which focus on bringing more investment into the country, with focus on creating jobs, with focus on carrying out regulatory and process simplifications, the direction of the government’s activity will be in this direction. So, therefore specifics on the textile policy, I would not like to and I cannot specify and I cannot spell out at this point of time.

Q: Any timeline by when we should expect the new textile policy to be unveiled?

A: Again, would not like to mention any timeline. As soon as it is ready, it will be announced. The government doesn't wait for timing any particular decision. As soon as there is a decision taken, as soon as something is final it is announced the very next moment. So, you will have to wait.

Q: Finally, we do have clarity on the spectrum auctions and perhaps it will go through some time in August but the budgetary estimation what you could accrue on account of the spectrum allocation. Some would say, spectrum auction was on the higher side. Do you feel confident of being able to achieve that number?

A: Before answering your question on spectrum auction, I just want to mention one point relating to the initiatives which have been announced for garments in the textile sector. If you read the announcement carefully, some of the incentives which have been announced in today's package have a sunset clause. These are not open ended incentives which will continue forever, they have a sunset clause.

Q: What is the sunset clause?

A: Sunset clause is 2019 i.e. three years from now. So, three years window has been opened, all these incentives will be valid for the next three years. So, we expect industry to make use of it and create additional jobs. This is in line with the budget announcements that when new schemes are launched they should have a sunset clause and at that time there has to be a review and based on the review further extension if at all will be decided.

Now, coming to the spectrum auction yes, you are right we had assumed that certain receipts figure through spectrum auction which was in the range of about Rs 50,000-55,000 crore and the indications are that we should be able to realise that amount.Q: You are saying you feel confident of being able to get to that Rs 50,ooo-55,000 crore which was the budgetary estimate of what you could accrue on account of the spectrum auctions? A: I am just giving some sort of an ad hoc number, it could be even little more. So, therefore I think we should be able to reach our budgeted estimates. Q: Let me also then ask you as far as the Ujjwal Discom Assurance Yojana (UDAY) scheme is concerned and we have seen some tweaking or modifications to the UDAY scheme for the power sector in specific. How meaningful will this be when it comes to the successful rollout of the UDAY plan? A: It is mainly enabling a few more states to come into the scheme; that I think is the main focus of the announcement. It is basically to enable a few more states to come into the scheme. Under the UDAY scheme the agreements, the MoUs with the state government and the discoms, it is already under way and many states have completed the process. Now there is very close monitoring being done by the ministry of power and the scheme seems to be working quite well so far. Q: Since Monday, we have seen a flurry of announcements coming in from the government but what more can we expect, what else is likely to be on the agenda? A: Specifics, as I told you earlier, I will not be able to give out but there is a lot of action in various fronts, in various sectors, in various ministries. So, as soon as they are decided they will be announced. Q: When can we expect the next round of announcements? A: I can’t say that.Q: I also want to ask you about the preparedness of the government as far as dealing with any possible impact of the Brexit are concerned. We have heard from the Reserve Bank of India (RBI) today saying that the RBI is gearing up but from the finance ministry’s perspective, how are you gearing up to any eventuality of a Brexit? A: First thing is that the current indications are that the Brexit perhaps will not happen. Now, in the unlikely event of Brexit happening, let me say very categorically that we are prepared to deal with all eventualities. I am saying so on the basis of three specific factors.One, India continues to be a very attractive destination for investment both by foreign portfolio investors (FPIs) as well as by the FDI investors. Two, in the last few months, there has been a steady inflow of investments, steady inflow of dollars through FDI and FPI route. Three, the forex reserves held by our central bank i.e. the RBI are in the comfortable territory of about USD 360 billion. So, all these things put together if there is any currency volatility, we should be able to deal with that situation. Other than that, so far as our trade, so far as our imports and exports are concerned, I think India is not going to be impacted at all. The impact will be very marginal if at all there is any.