Union Textile Minister Piyush Goyal Takes Stock Of Textile Sector Policies

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After taking over charge of the Ministry of Textiles, Piyush Goyal made a maiden visit to the Office of the Textile Commissioner, Mumbai to review the textile sector schemes and their progress and suggested measures to speed up implementation.

The Minster of State for Textiles Darshana Jardosh, was also present in the meeting. U.P. Singh, Secretary (Textiles) and V. K. Singh, Additional Secretary joined the meeting from New Delhi through video conferencing.

Some of his suggestions included:

  • Transparent and automated processing applications under subsidy-oriented schemes
  • Special dispensation for MSME
  • Deliberate with stakeholders including banks for resolving major issues under TUFS, once and forever
  • Simplify formats for submission of statutory returns from industry
  • Rationalization and optimal use of manpower of Office of the Textile Commissioner and Textiles Committee.
  • Cotton Corporation Of India should work out possibilities for providing kapas plucking machines to cotton farmers through start-ups established by availing Mudra loans
  • Develop financial instruments which are not subsidy focused, enabling stable credit flow from banks to the industry
  • Need for strategic plan to eliminate child labour in textile sector
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Piyush Goyal to review Rs 10,683 crore PLI scheme
The new textiles minister will soon also review the proposed Rs 10,683-crore Production-Linked Incentive (PLI) scheme for products made of man-made fibre and technical textiles, amid clamour for reducing the lofty turnover and investment targets for companies to avail of benefits.

Goyal, who is also the commerce and industry minister, faces a tough task, as the labour-intensive garment sector, comprising mainly MSMEs and dominated by cotton-based players, also wants the inclusion of value-added cotton products in the scheme to benefit a large number of businesses.

But the demands go against the government’s intent of luring mainly large companies to create few champions in key sectors through various PLI schemes. In textiles and garments, it also seeks to correct India’s historical policy bias towards cotton-based value chain that is, in fact, contrary to the global consumption pattern. The idea is to reclaim India’s export markets after ceding substantial ground to Bangladesh and Vietnam in recent years.

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In its draft PLI scheme floated earlier, the textile ministry proposed incentives in the range of 7-11% in the first year. But only those firms with annual turnover of at least Rs 100 crore were to make the cut. The benefits in all categories were proposed be reduced by 100 basis points each year after the first year and granted for a total of five years from FY22. “It’s a very important scheme, as it has potential to create a huge number of jobs. So, obviously, the minister’s guidance will be sought and he will review it,” said an official source.

The draft pledged as much as 11% incentive to large companies for investments over Rs 500 crore in greenfield projects in technical textiles. The benefit, however, was linked to an incremental turnover of Rs 1,500 crore in the first year and a 25% rise in turnover each year after that.

It also suggested that firms with an annual turnover of Rs 100-500 crore will be eligible for an incentive of 9% for brownfield projects. This will be subject to an increase in turnover by 50% each year.

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Similarly, companies with a turnover of Rs 500 crore or more were to be granted a 7% incentive in the first year. The benefit was tied to the condition that turnover has to be raised by 50% in the first year and by 25% each year after that.

The incentives were proposed to be extended for incremental production in 50 laggard categories (40 man-made-fibre-based garments and 10 technical textiles).

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