Proposes interest subsidy up to 12.5% for co-operatives and private sector.
Maharashtra, which produces 6.2 million bales of cotton annually, plans to provide an interest subsidy up to 12.5 per cent for the developer of spinning mills, power looms and other textile-related businesses in the state.
A draft textile policy, which came up for discussion at the state cabinet meeting on Wednesday, hopes to attract an investment of Rs 37,000 crore to process 4.5 million bales and create 1.1 million jobs in the textile sector in the next five years.
The government, however, plans to restrict its policy of providing share capital to cooperative spinning mills only in the cotton growing 20 districts of Vidarbha, Marathwada and Northern Maharashtra. This would not be implemented in non-cotton growing areas, especially Western Maharashtra where there are maximum number of cooperative spinning mills.
A senior Congress minister, who did not want to be identified, told Business Standard, "The government plans to keep a cap of 12.5 per cent wherein an interest subsidy up to that level will be provided to a developer of the spinning mills, powerlooms and other projects under the textile sector both in the cotton and non-cotton growing areas. In cotton growing areas, nearly 7.5 per cent subsidy will come from both the state and the central under the Technology Upgradation Financing Scheme while five per cent will have to be borne by the developer. In case of non-cotton growing areas, five per cent each interest subsidy will come from the state and the centre while promoter will have to bear the two per cent interest burden."
This is necessitated as even though Maharashtra produces 6.2 million bales of cotton annually, it was able to process 1.78 million bales only and the rest of bales go to Tamil Nadu.
The minister informed that the idea is to encourage more and more spinning mills, powerlooms, mills in ginning, pressing, handlooms, silk and even carpet making ones to process all 4.5 million bales which otherwise remain unprocessed.
"This will lead to a record production of 822.12 million kg, 3,800 million sq mt of cloth and 1,700 million pieces of shirts. A total investment of Rs 37,000 crore both in the cooperative and private sector is expected in next five years," he said.
He said during fifth five year plan and 10th Five Year Plan the state government has contributed more than Rs 1,000 crore towards share capital for the setting up of spinning mills in the cooperative sector. "Of the 123 mills planned, only 30 mills are so far operational to their full capacity, 32 mills are functioning partially while 25 mills are under construction and 28 mills are under liquidation. So far six mills have been closed and two mills have changed to non textile business. Majority of these mills are located in western Maharashtra," he said.
