Maharashtra’s new textile policy gives subsidy for self-financed projects

Trade & Policy

Maharashtra’s new textile policy gives subsidy for self-financed projects

Aiming to modernise and boost the textile industry in Maharashtra, the state government has announced capital subsidy for the upcoming self-financed projects in the state. According to new textile policy 2011-2017, capital subsidy will be given to self-financing textile projects — spinning mills, cotton ginning, processing and printing units, which will get 35% capital subsidy, technical textiles and composite units, which will be given 30% capital subsidy, and powerloom and other textile related units, which will get 25% capital subsidy.

This is for the first time that the state government has announced capital subsidy for the self financed textile units. So far, the government’s subsidy was credit linked. In addition, the upcoming textile units in North Maharashtra, Marathwada and Vidarbha can avail additional subsidy of 10%. Furthermore, the government will provide the capital subsidy in the above listed sector for the machineries which fulfill the Technology Upgradation Fund Scheme (TUFS) criteria of the Centre.

Aleem Faizee, Founder-Secretary of the Malegaon Industries & Manufacturers Association (MIMA) said, “This is indeed a big boost for the Indian textile sector, which is reeling under slowdown since more than a year now.” The Malegaon weavers, along with the other textile sectors, rejoiced over the government’s decision as the Malegaon Industries & Manufacturers Association (MIMA) has been demanding both the state and Union governments to delink capital subsidy since 2007. Under this policy, entrepreneurs who don’t want to take loans and are self-sufficient, can also avail this subsidy.

Of the 2.5 million powerlooms working in India, Maharashtra has more than 50% of them, comprising those running in Bhiwandi, Malegaon, Ichalkaranji, Sholapur, Nagpur and other textile clusters. In spite of the government releasing a huge amount of funds for modernisation under the TUFS, the country has so far been able to set up only around 2 lakh modern and shuttleless looms.