Contact us on +022 2419 3000 or

Maha Policy, maha hopes!

Mar 01, 2018
Maha Policy, maha hopes!

Reducing power tariff and raising capital subsidy for spinning mills are two key aspects of the new Maharashtra Textile Policy, which takes forward the ‘Make in Maharashtra’ concept to strengthen the cotton industry.

The Maharashtra Government has drafted an ambitious Textile Policy 2018-23, envisaging an investment to the tune of Rs 36,000-crore and aiming to create 10 lakh new jobs. Several schemes of Rs 4,649 crore will be implemented under the policy, which intends to create infrastructure for textile cluster and garment parks. The policy has also suggested to prepare proposal for setting up a textile university in Vidarbha region.

The State Cabinet approved the new textile policy for 2018-2023 and according to sources in the government, some of the major aspects of the policy include reducing the power tariffs and increasing capital subsidy to 45 per cent for spinning mills. Officials from the state textile department said the policy takes forward the Make in Maharashtra concept to strengthen the cotton industry and silk business. It aims to reduce the regional imbalance in the State as higher concessions would be given for setting up units in Vidarbha, Marathwada and North Maharashtra region. Separate emphasis will be on cotton producing regions, which have reported a large number of suicide by farmers.

The new policy has made provisions in reducing power tariffs for spinning mills. Besides, spinning mills, which were given financial assistance in several installments, will now get the financial assistance in two installments.

The power tariffs in Gujarat, Karnataka and a few other states are between Rs 4 and Rs 6 per unit while it is Rs 9 per unit in Maharashtra. So, the spinning mills will be encouraged to set up solar power plants on their land and the power generated from it will be utilised by the spinning mills. Hence, the power tariffs are likely to be reduced to Rs 3.5 per unit, according to government sources.

Besides, capital subsidy has been increased substantially for processing units, spinning mills, and modernisation of powerlooms. It proposes to give 45 per cent capital subsidy for processing units, and 25 per cent for spinning mills and modernisation of powerlooms. It has also proposed to give additional subsidy of 20 per cent for processing and garment units in Vidarbha, Marathwada and North Maharashtra.

Infrastructure will be created for textile cluster and garment parks, as per the policy, which also suggests setting up of a textile university in the Vidarbha region.

The main features of the New Textile Policy 2018-23 is as follow :

  • The policy aims to create over 10 lakh jobs in the next five years
  • With several investor-friendly benefits especially in terms of power subsidies, it is expected that textile sector would attract worth Rs 36,000 crore during this period.
  • There would be emphasis on reviving the garment, knitting and hosiery sector, which would benefit the women who form a major part of workers in the State.
  • The policy initiatives aim to strengthen the cotton sector and rejuvenate the silk & wool sector.
  • The highlight of the policy is the innovative approach to promote non-conventional yarn and green energy in the textile sector.
  • A holistic approach was observed while drafting the policy wherein skill development and R&D has been given priority.

Under the new proposals, Maharashtra plans to come up with its first textile university and set-up world class R&D units within state agriculture universities in collaboration with various Centres of Excellence across the country. It is the first time, Textile Department is looking at strengthening the finances of the textile sector by creating a “Textile Development Fund”, which would provide better infrastructure and development of the sector.

Highlights of Maharashtra State Textile Policy 2018-23

  • Strengthen the cotton sector: Encourage and support spinning mills in the cotton growing areas. The focus is to bridge the gap in the value chain by increasing spinning mills and also help in establishment of effluent treatment plant by providing additional capital subsidy.
  • Rejuvenate the silk and wool sector: Until now the focus has been on cotton promotion only; but now the Government also intends to promote wool and silk sector with special focus on tussar silk in Maharashtra. Necessary infrastructure and trainings will be provided to the farmers and artisans. Some of the key initiatives include creation of “AdhyatmikReshim” brand, silk tourism circle, silk cocoon centres, chawki centres, setting up automatic reeling centre, drying units, godowns for storing cocoon before reeling, etc.
  • Catalyse the potential of the non-conventional yarn: These include bamboo, banana, hemp, coir, etc. Additional 10 per cent subsidy for its production as well as its use in garmenting and technical textile will be provided. A special cell will be formed at textile department for promotion of non-conventional yarn in the State.
  • Harness the high technology sunrise sector of technical textile: In areas such as mobiltech, meditech, agrotech, sportech, etc.
  • Textile parks: Continuation of scheme providing Rs 9 crore or 9 per cent of project cost (GoI Rs 40 crore maximum) whichever is lower (SITP Scheme Projects). Setting up coastal textile park in Maharashtra at suitable location is also proposed. Presently, 14 textile parks by private investors and 10 textile parks by MIDC are being developed with ‘plug and play’ facilities and CETP.
  • Subsidy for green initiatives: Additional 10 per cent capital subsidy for vegetable dyeing as well as producing and using non-conventional and organic yarn. Further, to promote non-conventional power (solar and wind), only transmission charges will be applicable for those non-conventional power plants.
  • Electricity: A budget provision of Rs 150 crore is accounted for electricity subsidy to cooperative spinning mills with a cap of Rs 3 per unit. In case the burden on the total budget increases, the cap will be revised suitably. The benefit of powerloom will be extended to knitting, garmenting and hosiery units as well. Also, high tension line units with more than 107 HP will be eligible for subsidy of Rs 2 (excluding cooperative spinning mills). There will be no cross subsidy charges for open access power for textile units. Benefits of power subsidy given to powerlooms will be extended to knitting, garment and hosiery units as well.
  • Human resource development: For academic support, “State Textile University” will be set up in Vidarbha providing specialised courses in the focused sectors. Technical collaboration with institutes such as SASMIRA/ CIRCOT/ Centre for Sustainable Fashion, etc. will be initiated to grant specialised training to the artisans. An International Standard R&D centre will be established at State agriculture universities.
  • Financial strengthening through Textile Development Fund: The fund will be formed through mobilisation of assets, privatisation of spinning mills, CSR activities of private industries, etc.

Capital subsidy scheme for the State

Subsidy for units in:

  • Processing, technical textile, knitting, hosiery, garment: 40 per cent
  • Other processes not included in above, i.e., ginning and pressing, spinning mill; new power looms based on latest technology and; conversion of plain power loom to latest technology is 25 per cent; however, if a composite unit is set-up which has more than two more of these processes then the subsidy will be 35 per cent
  • Additional subsidy of 5 per cent to the units belonging to SC/ST and Minority community

Further, additional capital subsidy of 20 per cent is provided for processing, knitting, hosiery, garment and technical textile units in the Vidarbha, Marathwada and North Maharashtra region. Similarly for other processes such as ginning, composite unit, pressing, spinning mill; it is additional 10 per cent. Additional 10 per cent capital subsidy for vegetable dyeing as well as producing and using non-conventional yarn.

Projects with investment of more than Rs 500 crore would get an additional 5 per cent subsidy and for pioneer projects in a tehsil, additional 5 per cent subsidy will be provided.

Capital subsidy would be disbursed in two equal installments at third and fifteenth month from the date of commencement of production in the unit.

The state scheme of 25 per cent of project cost or Rs 37.50 crore whichever is lower for IPDS projects is continued in the new policy as well.

Capital subsidy is also provided for machinery required for ZLD-ETP/CETP. Further, matching grants would be given to units in accordance with centrally sponsored in-situ upgradation scheme for powerlooms.