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At a time when the cotton and man-made fibre textile mills based on conventional technology are closing down, the Gujarat government is banking on its textile policy and restructured Textile Upgradation Fund Scheme (TUFS) for reviving the ginning and spinning sectors.
As against a target of adding 2.5 million spindles in next five years under the Gujarat state textile policy, the government is now expecting to add 4 million spindles. The move comes at a time when, according to Ministry of Textiles figures, around 18 mills closed down till October 2013 which had been registered with the BIFR despite efforts to revive them.
"The mills could not be revived despite much efforts since they were based on a conventional technology. However, both the state's textile policy and the restructured TUF scheme has been laying emphasis on growing the ginning and spinning sectors. In fact, we anticipate a higher growth than we expected," said a senior government official of the Gujarat government. Currently, there are about 1.2 million spindles of spinning capacity in Gujarat.
According to state government officials, the recent announcement of fresh funds under the TUFS scheme will encourage newer units to be set up in Gujarat.
"While mills having been closing down, there are new units that are waiting to come up. Not only is the Gujarat textile policy that has been encouraging such units to come up but also the recently restructured TUF scheme which has been made more attractive," the official added.
To especially boost the spinning sector, the restructured Textile Upgradation Fund Scheme (TUFS) is looking to offer four per cent interest reimbursement for a period of seven years including two years of implementation and moratorium.
On its part, Gujarat offers just a seven per cent interest subsidy for spinning and garment units and five per cent interest subsidy for rest of the units, under the policy. The Gujarat textile 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.
"Both the state policy and the restructured TUF scheme have been very encouraging for us, especially at a time when mills are closing down. Thanks to subsidies and benefits being offered by both, firms that were earlier planning to set up ginning units are now planning to go a step further and set up spinning units as well," said Jitu Vakharia, president of South Gujarat Textile Processors Association (SGPA).
