Mumbai: In a landmark decision taken for the growth and modernization of the textile industry, the Maharashtra government has announced capital subsidy for the upcoming self-financed projects in the state. The state government has also announced special subsidy for the textiles units in North Maharashtra, Marathwada and Vidarbha.
As per the government GR No. 2015/151/Tex-5 to give Capital Subsidy under new textile policy 2011-17 to the self-financing textile project, the Spinning Mills, Cotton Ginning, Processing and Printing units will be given 35% capital subsidy, Technical Textiles and Composite Units will be given 30% capital subsidy, and power loom and other textile related units will be given 25% capital subsidy.
The government resolution further said that the upcoming textile units in North Maharashtra, Marathwada and Vidarbha can avail additional subsidy of 10%.
“Additional subsidy of 10% is announced for these regions as they are cotton growing areas and establishment of new units in these areas will help the industry and in generating employment”, the GR said.
The resolution further said that the government will provide the capital subsidy in above listed sector for the machineries which fulfill the Technology Upgradation Fund Scheme (TUFS) criteria of the central government.
This is for the first time that the state government has changed its policy to extend the benefits of subsidy to the self-financed textile units. Till now the government’s capital subsidy was credit-linked and was subject to the loan taken from the bank.
The government’s decision has rejoiced the weavers in Malegaon and other textile sectors.
“This indeed is a big boost for the textile sector which is reeling under slowdown since more than a year now”, Aleem Faizee, Founder-Secretary of the Malegaon Industries & Manufacturers Association (MIMA) said while talking to ummid.com.
He said MIMA was demanding from the state and union governments since 2007 to de-link the capital subsidy so that the entrepreneurs who are financially sound and don’t want to take bank loan can also avail the benefits of government scheme.
“In a meeting with Planning Commission of India in January 2007, we had requested the government to de-link the subsidy if it wanted maximum results. The Maharashtra government’s decision will surely speed up the modernization”, he added.
There are about 2.5 million power looms in India. Maharashtra has more than 50% of this total running in Bhiwandi, Malegaon, Ichalkaranji, Sholapur, Nagpur and other textile clusters. Despite government releasing a huge amount under TUFS for modernization, so far the country has been able to install just 02 lakh modern and shuttle-less looms.