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The ailing textile sector in India got a major boost this year with a slew of policies announced by the Central as well as state governments to help the handloom, powerloom sectors and the main stream industry so that fresh investment would start flowing into this sector. Gujarat, Rajasthan, Karnataka and West Bengal were in the forefront in announcing industry-friendly policies.
The Gujarat Government recently notified the Textile Industry Promotion Policy 2012. The new policy is expected to attract an investment of over Rs 20,000 crore during the next five years.
The Rajasthan government adopted a new textile policy under the special customized package for textile sector enterprises, 2013, which was cleared by the state cabinet in July 2013. Among several incentives, the new policy also provides interest subsidy for setting up new industries and reimbursement of 60 per cent of value added tax (VAT) paid to the state government.
The policy will be valid till March 2020 and is applicable to new enterprises as well as to the existing firms undertaking modernization and expansion of their units. The Rajasthan government expects an investment of Rs 10,000 crore over the next seven years, under this package.
The West Bengal government finalized its textile policy in August 2013. Under the policy, the state will set up 200 handloom clusters across the state, with an average of 10 clusters in each district. The government will also set up Spinfed Holding company by bringing all state-run mills under one umbrella, and has proposed to set up a mega powerloom park spread over 100 acre in Belur.
The Karnataka Government has also drafted a draft textile policy, which will soon be placed before the State Cabinet for approval. The new textile policy is expected to attract about Rs 10,000 crore investment in the state’s textile sector.
At the Central level, the Cabinet Committee on Economic Affairs (CCEA) approved the continuation of the Scheme for Integrated Textile Parks (SITP) in the 12th Five Year Plan, in October 2013. The CCEA also approved an additional grant of Rs 10 crore to be given to existing parks under SITP for setting up apparel manufacturing units, out of the Rs 50 crore allocated for this purpose.
The SITP was first approved in the 10th Five Year Plan to provide the industry with world class infrastructure facilities for setting up their textile units. The overall impact and progress of the SITP has been positive and the scheme has been successful in terms of leveraging private sector investment and creating product-based infrastructure for the industry.
Around 40 textiles parks were sanctioned under the SITP scheme in the 10th and 11th Five Year Plans. Subsequently, 21 new textile parks were sanctioned in October 2011. As of now, commercial production has commenced in 26 of the 61 integrated textile parks. Of these 26 SITPs, seven parks are in Gujarat, six in Maharashtra, four in Tamil Nadu, three each in Andhra Pradesh and Rajasthan, two in Punjab, and one in Karnataka.
In future, new textile parks are proposed to come up at Nagpur in Maharashtra, at Eraiyur village in Perambalur district of Tamil Nadu, in Gurmitkal area of Karnataka’s Yadgir district, in the Kashipur-Jaspur area of the Kumaon region in Uttarakhand and another one in Madhya Pradesh.
In September 2013, CCEA also approved the continuation of Comprehensive Powerloom Cluster Development Scheme (CPCDS), a Central Sector Plan Scheme, during the 12th Five Year Plan.
CPCDS assistance, under the modified scheme will supplement the development of existing brownfield facilities and infrastructure and enhance their productivity through provision of common infrastructure facilities, modern technology, designing, testing, skill development etc.
The modified scheme, with an outlay of Rs 110 crore for the 12th Plan, will be implemented through a Public Private Partnership (PPP) model. CPCDS was launched in 2008-09 by the Central Government for development of Powerloom Mega Clusters at Bhiwandi (Maharashtra) and Erode (Tamil Nadu). Subsequently, two more Powerloom Mega Clusters, Bhilwara (Rajasthan) in 2009-10 and at Ichalkaranji (Maharashtra) in 2012-13, were brought under its purview.
The CCEA also gave its approval for implementation and continuation of Technology Upgradation Fund Scheme (TUFS) during the 12th plan period in August 2013. TUFS aims to make funds available to the textile industry for technology upgradation of existing units. The cotton textile industry is set to attract Rs 4,000 crore investment in the next six months, with the sector set to receive the so-called margin money from the finance ministry under the TUFS.
In August 2013, the Cabinet Committee on Skill Development approved the continuation of Integrated Skill Development Sector (ISDS) during the 12th Plan period, to train 15 lakh persons with an outlay of Rs 1,900 crore. The textile sector is expected to generate additional five million jobs by 2017, taking the total employment in this sector to about 50 million.
The Union Ministry of Textile will also unveil a new textile policy for 2013, aimed at providing stability and covering a wide range of issues, in a couple of months. The Textile Ministry is also considering setting up a single window clearance division to facilitate quick approvals for new textile units. As of now, a company wanting to set up a textile unit has to seek about 50 approvals from various departments, the proposed division is likely to ease this process by getting the requisite clearances.
Among the ongoing projects, a notable one is being set up by Trident Limited, the flagship company of the Trident Group. The company’s investment plans were set rolling by laying the foundation stones for two spinning units and a sheeting unit in Budhni, Madhya Pradesh, in September 2013. The units are coming up with an investment of Rs 1,667 crore and are expected to be fully operational by September 2015.
The Trident Group’s Lotus Integrated Texpark at Barnala district in Punjab was the first textile park to be set up in North India under SITP. The park became operational in July 2013. The park, spread over an area of 100 acre, was set up under the public-private partnership (PPP) mode by the Trident Group.
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