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To attract investments, Maharashtra has rolled out a red carpet for the Gujarat textile sector. State textile minister Naseem Khan plans to lead a high level delegation to Ahmedabad in May to ask the textile industry in Gujarat to invest in Maharashtra in order to take the benefit of the newly released textile policy and the sops offered for development of textile parks in the state.
Maharashtra textile policy offers a 10 per cent capital subsidy for new textile projects in Vidarbha, Marathwada and north Maharashtra, and 12.5 per cent interest subsidy on long-term loans linked to centrally-sponsored Technology Upgradation Fund Scheme for new projects. Speaking to Business Standard, Khan said, “Gujarat is the largest cotton producer and it houses a large number of textile units. Therefore, the move is an attempt to meet the representatives of Gujarat textile industry in Ahmedabad sometime in May and ask them to invest in a big way in Maharashtra. The government has adopted a zero-window policy wherein all procedures will be done in a transparent manner and no government clearances are required.”
Khan said the government would deposit the necessary amount towards interest and capital subsidies in the banks. According to the minister, this is for the first time that the state government is providing capital and interest subsidy to the private sector, while the cooperative spinning mills in Vidarbha, Marathwada and north Maharashtra would be given equity support in the ratio of own share capital (5): government share capital (45): loan (50).
Khan said the new textile policy aimed at attracting an investment of Rs 40,000 crore by 2017. The main objective of the policy was to lay special emphasis on setting up processing units in the cotton producing sectors, facilitate expansion of the textile industry and generate employment, Khan added. It will lead to creation of 11 lakh new jobs in the sector in the next five years.
Khan said Gujarat textile industry members would also be asked to invest in the proposed 14 textile parks in Maharashtra approved by the central government. “The state government will provide nine per cent capital subsidy or up to Rs 9 crore, whichever is less, for the infrastructure development in the proposed textile parks. This is in addition to the Rs 40 crore subsidy from the central government. Investment of Rs 750 crore each is envisaged for the development of the 14 textile parks — which means a total investment of over Rs 10,000 crore. One textile park is expected to house 50 units. The government also wants Gujarat industry to make investment in the proposed textile parks.
Khan’s move to tap investments from Gujarat, which produces 12 million bales of cotton against nine million bales in Maharashtra, deserves mention especially when it accounts for 12 per cent share of the country’s total textile exports. About 250 large fabric processing houses are located in Ahmedabad and another 350 in Surat, with the latter being the largest centre for art silk fabric producing over 40 per cent of total production in the country.
The Associated Chambers of Commerce and Industry of India, in its recent report, said nearly 23 per cent of the state’s gross domestic product comes from textile and related industries. Gujarat is the largest cotton-producing state and accounts for 30 per cent of woven fabric and 25 per cent of decentralised powerloom sector in the country. According to Assocham, Gujarat is emerging as a technical textiles hub with an industry size of over Rs 20,000 crore.