.Ginning and spinning have been struck off from a list of over eight manufacturing activities that will be eligible for incentives under various schemes, including credit linked interest subsidy of 6 per cent for MSMEs and 4-6 per cent for large enterprises.Under the state’s new textile policy 2019 announced on Thursday, the government has removed incentives for two crucial activities — ginning and spinning — that occupy an important role in the textile value chain
Ginning and spinning have been struck off from a list of over eight manufacturing activities that will be eligible for incentives under various schemes, including credit linked interest subsidy of 6 per cent for MSMEs and 4-6 per cent for large enterprises. “Sectors like ginning, spinning and technical textiles saw tremendous growth during Gujarat Textile Policy 2012… The state government analysed the existence of all segments in the textile value chain and identified gaps in certain segments. After careful consideration, the government has decided to come out with a new scheme to strengthen the value chain and extend support to textile industry in the state of Gujarat,” states a copy of the new policy accessed by The Indian Express.
The move to exclude spinning and ginning units is significant, considering that in the 2012 textile policy — that remained in force till September 3, 2018 — credit linked interest subsidy of about 7 per cent was provided to spinning units, which included those using 100 per cent cotton or blended with any textile fibers. Ginning activities were also covered under this subsidy. The government while providing these incentives five years ago had pointed out that “due non-availability of spinning activities, over 90 per cent of Gujarat’s cotton goes to other states for further value addition, and therefore there is a need to transform the state cotton industry as the leader in manufacturing yarn, fabric and garment with a policy to work on five Fs — Farm, Fibre, Fabric, Fashion (Garment) and Foreign (Export).”