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Guj unveils new textile policy

Aims to attract investment worth Rs 20,000 crore in five years time

BS Reporter  |  Mumbai/ Ahmedabad 

Terming it as another 'White Revolution in Cotton', Gujarat Chief Minister Narendra Modi on Wednesday announced Gujarat Textile Policy 2012.

Titled as 'Navi Gujarat Vastraniti', the policy looks to attract investment of over Rs 20,000 crore as well as creating new employment opportunities for over 2.5 million people in next five years.

In a bid to make the policy as integrated as possible, Gujarat government has announced a slew of incentives as part of the new textile policy. The policy has been designed to address issues of almost the entire textile value chain in the state. "The objective of the new policy is in keeping the interest of the cotton growing farmers, better price realization in national and international markets, and value addition in the entire chain. It has an integrated approach to strengthen the value chain of 'Farm to Fibre to Fabric to Fashion to Foreign', enhancing sustainable growth of farmers and industry," said Modi in an official statement released by the state government.

  • Cotton spinning and weaving parks around cotton growing areas
  • Interest subsidy for value-addition chain from ginning to spinning, weaving, processing, garment manufacturing and technology up-gradation
  • Refund of VAT on expansion of existing and new units in spinning and ready made garments
  • Power tariff concession for new cotton spinning and weaving units
  • Financial assistance to skill development centres for textile industry
  • Financial assistance for technology acquisition for value chain
  • Support for energy and water conservation and environmental compliance.

To begin with, interest subsidies at varying rates of 5-7 per cent on new plant and machinery will be provided for five years to cotton ginning, spinning, weaving, dyeing, processing and garmenting units, apart from units engaged in technical textiles. The subsidies offered will be subject to varied ceiling. Moreover, power tariff concessions for new cotton spinning and weaving units will also be offered at Re 1 per unit for five years.

For cotton spinning activities vertical, a minimum of 150 acre land, stamp duty exemption will be offered to developers and units, and assistance up to 50 per cent with maximum ceiling of Rs 30 crore for common infrastructure for Cotton Spinning Park, and ceiling of Rs 10 crore for common infrastructure in parks and other textiles activities.

Ginning, spinning and weaving units will also be paid a refund of value added tax on on purchase of cotton/cotton yarn and remission of tax collected on cotton yarn. Similarly, for weaving vertical, the policy aims at technology upgradation of existing synthetic and filament powerloom weaving industry in order to fulfill overseas market requirements of art silk industry. With an aim to encourage energy-efficient and environment friendly dyeing and processing units, an assistance up to 50 per cent for audit report amounting to maximum of Rs 50,000 and assistance up to 20 per cent of cost of equipment subject to maximum Rs 20 lakh will be offered subject to eligibility once in 2 years during operation period of the scheme.

While it has been promoting apparel parks across the state, Gujarat government has now introduced refund of VAT paid by a unit on purchase of raw material and remission of tax collected on ready made garments. Moreover, to boost skill development in apparels in the state, the government will offer assistance up to 85 per cent subject to maximum Rs 3 crore, excluding land cost for setting up apparel training institutes. For promoting rural women employment, the policy will also offer reimbursement of tuition fees to trainees as assistance at 50 per cent, up to Rs 7,000 per trainee per course and Rs 7,000 per trainer per week as assistance to training to trainers.

To further promote the technical textiles vertical in the state, interest subsidy of six percent on new plant and machinery, besides second hand imported machinery with certain conditions allowed, without ceiling for the 5 year period will be provided.

Meanwhile, in order to promote adoption of of modern technology, the policy has tried to encourage units for acquiring technology from abroad.

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First Published: Thu, September 06 2012. 00:49 IST