Giving a boost to the textiles segment, the government today allocated Rs 2,400 crore for modernisation of the power-loom sector and earmarked Rs 50 crore for setting up of apparel parks

However, the customs duty on raw silk has been raised by 10 per cent. "Basic customs duty on raw silk (not thrown) of all grades is being increased from 5 per cent to 15 per cent," Finance Minister P Chidambaram said in his Budget speech.

For modernisation of the power-loom sector, the Minister proposed providing Rs 2,400 crore in 2013-14 for the purpose.

He allocated an additional sum of Rs 96 crore in the next fiscal to the Ministry of Textiles for interest subsidy.

Chidambaram also proposed setting up apparel parks within the Integrated Textile Parks to house apparel manufacturing units.

"To incentivise such apparel parks, I propose to allocate Rs 50 crore to the Textiles Ministry to provide an additional grant of up to Rs 10 crore to each park," he added. Till now only textile parks have been set up under the scheme.

The Minister announced a new 'Integrated Processing Development Scheme' with an outlay of Rs 500 crore, which will be implemented in the 12th Plan to address the environmental concerns of the textile industry, including improving the effluent treatment infrastructure.

"I propose to provide Rs 50 crore in 2013-14 for the scheme," he said.

Further, Chidambaram said the readymade garment industry is in the throes of a crisis and the sector needs a lifeline.

He accepted the industry's demand to restore the 'zero excise duty route' for cotton and manmade sector (spun yarn) at the yarn, fabric and garment stages.

"...In the case of cotton, there will be zero duty at the fibre stage and in the case of spun yarn, there will be a duty of 12 per cent at the fibre stage".

The zero excise duty route would be in addition to the Cenvat route now available, he added.

The government proposed to totally exempt handmade carpets and textile floor coverings of coir or jute from excise duty.

Further for the handloom sector, the Minister proposed for working capital and term loans at a concessional interest of six per cent. As much as 1,50,000 individual weavers and 1,800 primary cooperative societies will be benefited in 2013-14 due to this step.

He also announced reduction of basic customs duty on textile machinery and parts to 5 per cent from 7.5 per cent.

Chidambaram proposed to continue the Technology Upgradation Fund Scheme (TUFS) for the textile sector in the 12th Plan with an investment target of Rs 1,51,000 crore. The TUFS was launched in 1999.