In a pre-budget memorandum to the finance ministry, the ICMF has suggested that effective excise duty for cotton polyester blended yarn should be brought down from the current 20.7 per cent to 10 per cent and for other blended and manmade spun yarns from 20.7 per cent to 15 per cent. In addition, the dual levy on fabric up to Rs 30 per square metre and above Rs 30 per square metre should be discontinued since there is much scope for evasion through under invoicing. ICMF has also sought the withdrawal of exemption granted to hand processing of fabric because of rampant pseudo hand processing whichagain leads to evasion. The federation feels that it is high time all sectors of the textile industry are treated on par and given a level playing field. The protection to decentralised sector has caused a lot of distortion which only results in a loss to the exchequer through tax evasion. According to sources at the finance ministry, there was excise evasion to the tune of about Rs 2,000 crore in the decentralised processing sector. However, ICMF puts this estimate at Rs 3,500 crore. The federation has therefore strongly pleaded for effective measures to curb these evasions by bringing all sectors on par. After the discontinuation of Janata Cloth Scheme, there is no case for collecting 15 per cent additional duty on textiles and ICMF has asked for its immediate abolition. While quota system under Multi-Fibre Arrangement (MFA) is being phased out as also India would provide market access for imported textiles, Indian textile industry needs to modernise at a fast pace to withstand competition from abroad. Itis therefore imperative to activate Technology Upgradation Fund without any delay, says Gajaria. Other suggestions by ICMF include extension of Modvat credit to multi-locational units of composite mills; parity of treatment between organised and decentralised units by withdrawing excise exemptions; inclusion of high speed diesel oil (HSD) under Modvat scheme; reduction of excise on textile machinery from 13 per cent to 10 per cent; reduction in the threshold from Rs 20 to Rs 3 crore for duty-free import of textile machinery under EPCG scheme; immediate implementation of Technology Mission on Cotton; need for adequate finance to textile units.