Telangana Unveils Textile & Apparel Incentive Scheme To Attract New Enterprises

Trade & Policy

Telangana Unveils Textile & Apparel Incentive Scheme To Attract New Enterprises

The Telangana state government has announced the Telangana Textile and Apparel Incentive Scheme 2017, which provides a slew of capital as well as operational incentives for textiles and apparels industries to be established in the state. These incentives will be applicable for both new industries as well as existing units for the next five years.

According to a government order issued by Telangana’s Principal Secretary Jayesh Ranjan recently, these incentives will provide capital assistance, operational assistance, infrastructure support, capacity building and skill development support, besides a fibre-to-fabric incentive. For units established with an investment of Rs 200 crore or above or providing more than 1,000 jobs, these incentives will be customised further.

A capital subsidy of 25% will be provided for conventional textile industries and 35% for technical textiles industries involved in production of medical textiles, geotextiles, agrotextiles and protective clothing, among others.

An additional capital subsidy of 5% will be provided to units promoted by SC/ST entrepreneurs or persons with disabilities. A capital incentive of 20% of cost of plant and machinery up to Rs 5 crore per unit will be provided to existing units for modernisation as well as adoption of advanced technologies.

An additional rebate of 5% will be extended on capital investment and power, for industrial units with integrated production chain units comprising production of textile fibre to fabric.

An operational assistance of up to 75% will be extended towards interest rates, against loans availed for establishment of these units over a period of eight years. Power subsidy ranging from Rs 1 to Rs 2 per unit will be provided depending on the size of each industry up to five years.

The Telangana government will reimburse 100% of stamp duty paid for land purchase or lease, while GST collected on end products within the value chain, will be reimbursed 100% for a period of seven years.

Towards infrastructure support, the government will allot land with rebate up to 50% on land cost for major industries or 25% rental subsidy on built-up space owned by Telangana State Industrial Infrastructure Corporation Ltd for MSME units. Subsidies will be provided on industrial water supply, environmental conservation infrastructure, and infrastructure like roads, power and water.

Under its Telangana State Skills Development Mission, the government will provide subsidies towards capacity building and skill development support to facilitate reputed institutions involved in textiles-related training programmes to set up their permanent centres in the State.

As part of the Returning Migrants’ Incentive Scheme to encourage the return of Telangana-based weavers who left the state to work in other states, the government will provide 50% of the capital investment required to be borne by the weaver group to develop textile parks as per Scheme for Integrated Textile Parks (SITP) guidelines, Government of India as well as MSME cluster development incentives and other government schemes.

Only groups which comprise at least 60% of Telangana origin weavers who migrated to work in other states will be eligible for such subsidy support. Also, the capital investment subsidy for this scheme will be limited to Rs 2 crore or 50% of the required beneficiary group contribution, whichever is lower. The idea behind the initiative is to incentivise lakhs of Telangana origin textile workers employed in textile clusters in places like Surat, Bhiwandi, Sholapur and Ichalkaranji to return to their home state.

The Telangana government’s objective is also to encourage investments in downstream processing activities focusing on spinning, weaving, knitting, processing and garment manufacturing including made-ups within the state. In addition to encouraging new units, these incentives are also aimed at supporting modernisation efforts of existing units, their expansion as well as marketing and promotion activities.

However, the government has reserved the right to terminate approvals granted and recover the monetary value of such incentives if these industrial units fail to provide a fair and decent wage to the workforce.