“Manchester of the East” Gets New Textile Policy

The new policy document of the Gujarat government, released on January 10, 2019, is named “Scheme for Assistance to Strengthen Specific Sectors in the Textile Value Chain” and shall be operative from 4th Sept 2018 to 31st Dec 2023. The above statement is taken from this policy document. It also says that the Gujarat Textile Policy 2012, which was operational till 3rd Sept 2018, proved to be very successful in terms of investment and employment generation. The Gujarat Garment & Apparel Policy 2017 was issued in October 2017 because “garmenting was found to be deserving separate attention with regard to various catalysing factors present in the state.”

The new “Scheme” is the result of the State Government’s analysis of all the existing textile value chain segments. “The government identified gaps in certain segments and after careful consideration, it decided to come out with a new scheme to strengthen the value chain and extend support to Textile industry in the State of Gujarat.”

The new policy needs to be carefully read and examined as there are lot of technicalities involved regarding non-technical aspects of the textile business. Some of them are illustrated below:

Forward/Backward integration: If the existing enterprise makes investment to undertake forward/backward integration of existing product line, it will be eligible for incentives. In this case, it shall have to increase its gross fixed capital investment of the existing enterprise by at least 25% during the operative period of the scheme. Such forward/backward integration will be eligible only if the existing enterprise has reached the utilization of existing installed capacity to the extent of at least 75% in any one of the immediately preceding two financial years. However, ginning or spinning as a part of forward/backward integration will not be eligible for incentives .

Power Tariff Subsidy: Available to new enterprise, expansion and forward/backward integration. Separate sub-meter for each expansion or forward/backward integration will have to be installed in the same premises. For expansion or forward/backward integration, only the additional energy consumption (Kwh) will be considered for eligibility. The power consumed from its own captive power plant will not be eligible.

Manpower: At least 85% of the total manpower of the enterprise and at least 60% of supervisory and managerial staff shall have to be domiciled in Gujarat.

Hope, the benefits of the scheme reach to the good-intentioned, deserving and needy people who may or may not have full knowledge, experience or expertise of executing complicated process of availing subsidies from the government schemes. Often, small entrepreneurs like to keep themselves away from the bureaucratic hassles involved in the process. Good Luck to all.

Managing Editor


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