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The Southern India Mills’ Association

Committed to Foster the Growth of the Textile Industry

Gujarat comes to the aid of textile sector

The assistance for the entire value chain starts where the previous textile policy left off
The Gujarat government on Thursday announced the much-awaited support scheme spanning the entire textile value chain.
With incentives in the form of interests/power tariff subsidy, the new scheme will also provide assistance in a variety of areas such as technology upgradation, environmental compliance cost and for textile parks.
Named ‘Scheme for Assistance to Strengthen Specific Sectors in the Textile Value Chain’, the scheme will be operative from September 4, 2018 to December 31, 2023.
An official statement issued on Thursday said: “The 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.”
Local employment
Aimed at creating local employment, the scheme requires at least 85 per cent of the total manpower of an enterprise and at least 60 per cent of supervisory and managerial staff to be domiciled in Gujarat.
The previous Gujarat Textile Policy 2012 which was operational till September 3, 2018, proved successful in terms of investment and employment generation in ginning, spinning and technical textiles, it said.
The scheme comes at a time when the State’s textile industry is facing tough challenge from textile hubs in Telangana, Andhra Pradesh and Maharashtra.
Segments covered
The segments covered under the scheme include weaving, knitting, dyeing/printing, machine carpeting, technical textile, made-ups, composite units and other activities in the textile value chain such as embroidery, winding, sizing twisting and crimping.
The scheme provides financial assistance through credit-linked interest subsidy of 6 per cent for MSME and 4-6 per cent for large enterprises with an upper ceiling of Rs. 20 crore per annum. A separate scheme for subsidy in power tariff allows up to Rs. 3 per unit for weaving and Rs. 2 per unit for other eligible segments. The eligibility period for these benefits is five years.
The scheme for assistance in compliance of energy, water and environment conservation covers all existing units in operation for more than three years. The scheme provides 20 per cent assistance on the cost of machinery with a ceiling of Rs. 30 lakh and 50 per cent assistance for audit fees with a limit of Rs. 1 lakh. The benefits can be availed once in two years during the operative period of the scheme.
For technology upgradation and modernisation in textile value chain, the scheme provides one-time financial assistance of up to 50 per cent of the cost with a limit of Rs. 25 lakh.
The State government has also extended support for setting up textile parks with financial assistance of up to 25 per cent of capital expenditure on common facilities and infrastructure with a limit of Rs. 15 crore. The park will also get financial assistance to create hostel facilities within park with minimum 100 workers domiciled in Gujarat.
The developer of Park will get complete reimbursement of stamp duty paid on purchase of land required for the new Park.