Cabinet approves reforms to boost employment generation and export in textile made-up sectors

PMPRPY scheme, which amounts to Rs 1,170 cr, has been extended to garments sector

The Cabinet on Wednesday approved the components of the ambitious Rs 6,000- crore textile package announced by the government in June 2015. It aims to improve competitiveness and generate jobs in the textile sector through a string of labour reforms

Targeting apparel manufacturing, the specific sub-sector within textiles, the package employment to 1 crore people aims to push up exports by $30 billion and bring in investment worth Rs. 74,000 crores – all in three years.

The bulk of the planned capital outlay, an estimated Rs 5,500 crore, is expected to be spent on an additional five per cent duty drawback given for garments. Duty drawback is a refund of duties on imported inputs for export items.

On Wednesday, the government formalised the provision of additional subsidy of 10 per cent to be given for made-up garments through the Technology Upgradation Fund Scheme (TUFS). This will be based on additional production and employment after a period of 3 years.

Also, increased government funding for provident funds of new employees with an eye on to boosting hiring has been approved. The government currently bears 8.33 per cent of the employer’s contribution. The Pradhan Mantri Paridhan Rozgar Protsahan Yojana (PMPRPY) scheme, that amounts to Rs 1,170 crore, has been extended to apparels providing an additional 3.67 per cent share of employer's contribution, for the first three years to every employee.

The simplification of labour laws has also been approved, where increasing permissible overtime up to 100 hours per quarter in made-up manufacturing sector has also been approved.