State expects Rs 40,000 cr investment in 4 years from capital, interest subsidies
In a bid to boost private investment in the textile sector, the Maharashtra government will provide 10 per cent capital subsidy and up to 12.5 per cent interest subsidy for projects linked to the Textile Upgradation Fund Scheme (TUFS).
State textile minister Naseem Khan on Tuesday said capital subsidy would be given to set up textile units in cotton-growing Vidarbha, Marathwada and north Maharashtra. “On the other hand, interest subsidy will be provided for textile units to be set up across the state,” he told Business Standard.
Of the 12.5 per cent interest subsidy, the state government’s contribution will be seven per cent, while five per cent will come from the TUFS. “Maharashtra expects to attract an investment of Rs 40,000 crore in the next four years. It will generate 1.5 million jobs,” Khan said at the sidelines of a seminar that saw representation from leading textile units including Raymond, Century Textiles and Damodar Threads.
The minister said the government had so far been providing a slew of financial incentives to the state’s cooperative textile mills, but the new textile policy would imply extension of capital and interest subsidy to private textile mill developers as well.
According to Khan, Maharashtra produces nine million bales of cotton. Of this, two million bales are currently processed in the state, while seven million bales are either being exported or procured by Gujarat, Karnataka and Andhra Pradesh. “Therefore, the policy aims to extend these incentives so that the benefits go to all units including ginning, pressing, weaving, spinning, dyeing, readymade garments, powerlooms, handlooms and auto textile,” he added. “With the establishment of these units by the private sector, the cotton produced in the state can be used by them.”
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According to the minister, the emphasis has been given on “zero window system”, as the entire transaction would be done online. “There will not be any interface with government departments and branches as the developer can complete the formalities online and seek the necessary incentives,” he said.
Further, the government has proposed a Rs 500-crore subsidy towards the use of electricity for powerlooms. In addition, the government has reduced the tax rate to two per cent from the present level of five per cent on yarn. “These budget proposals will also make investments in textile sector in Maharashtra the most attractive one,” he noted.