Budget and Textiles

The Union finance minister Pranab Mukherjee is reported to have warned the textile industry that if it failed to pass on to the consumers the budgetary concessions it would meet the same fate as the tyre industry whose concessions were withdrawn. He has provided "substantial relief 1 to the industry "with a view to making cloth cheaper" and the industry is expected to "benefit through increased demand that lower prices would generate". This sounds quite plausible but it is an oversimplification of a complex market phenomenon.