New Gujarat Textile Policy Announced, Aims To Boost Local Employment, Value Addition and Competitiveness

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The much awaited Gujarat Textile Policy has been announced today.  Named as ‘Scheme for Assistance to Strengthen Specific Sectors in the Textile Value Chain’ or popularly known as Gujarat textile Policy shall be effective retrospectively from 4th September, 2018 to 31st December, 2023. So, continuity of the support scheme remains intact. Earlier policy has expired in September 2018 after one year of extension.

The Gujarat government has covered the entire textile manufacturing value chain under the revised support scheme while incentives to investors would be in the form of interest subsidy, power tariff subsidy. The new policy will also provide assistance in technology upgradation, environmental compliance cost and setting up of textile parks. With this, almost all the Indian states have very attractive textile policy to draw investment and generate employment.

An official statement 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.”

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Here to note that the previous Gujarat Textile Policy 2012 that was operational till September 2018, was highly successful in augmenting investment in the textile sector and thereby employment generation in ginning, spinning, weaving, knitting, apparel, denim and technical textiles sector.

Benefits and Sectors Covered
The new textile policy will benefit almost all the sectors including composite units, weaving, knitting, dyeing and processing, printing, technical textile, made-ups, and other  manufacturing activities like embroidery, winding, sizing twisting and crimping. The new Gujarat textile policy has specifically made exclusion of the Ginning and Spinning sector from the scheme.

The scheme provides financial assistance through credit linked interest subsidy of 6 per cent for MSME and for large enterprises the subsidy would be 4-6 per cent with an upper ceiling of Rs. 20 crore per annum. A separate scheme for power tariff offers subsidy up to Rs. 3 per unit for weaving and Rs. 2 per unit for other eligible segments. The eligibility period for all these benefits is five years.

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Also, the new policy includes a scheme for assistance in compliance of energy, water and environment conservation which covers all existing units in operation for more than three years. This 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. However, this benefit can be availed once in two years during the operative period of the scheme.

For technology upgradation and modernisation, the scheme provides one-time financial assistance of up to 50 per cent of the cost with a limit of Rs. 25 lakh.

The policy also supports 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. Textile park set up under this scheme can also receive financial assistance to build hostel facilities within the park for minimum 100 workers domiciled in Gujarat. Gujarat Govt. would also reimburse entire amount of stamp duty paid on purchase of land required for the park.

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Emphasis On Local Employment
The new textile policy is aimed at creating local employment as this has been a political issue off late. The scheme comes with a string that beneficiaries should employ at least 85 per cent of their total manpower and at least 60 per cent of supervisory & managerial staff to be domiciled in Gujarat.

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