Gujarat subsidises power tariff for textile companies for 5 years

Friday, Jan 11


AHMEDABAD – The Gujarat government today notified a scheme for the textile sector, which provides power tariff subsidy of up to 3 rupees per unit for weaving and two rupees per unit for other segments.


These sops would be provided for five years, effective from Sep 4, 2018, official sources said.


The new policy, dubbed as "Scheme for Assistance to Strengthen Specific Sectors in the Textile Value Chain" will replace the earlier 'Gujarat Textile Policy – 2012'.


Gujarat has a sizeable share in the country's textile value chain, beginning from producing raw material to fabric. While Gujarat accounts for about 35% of the country's cotton production, it has 12% share of man-made fibre, synthetic fabric and denim production of the country. Almost 30% of India's mill sector production of fabric and 25% of technical fabric is produced in the state.


The new policy also comes at a time when the industry in Gujarat is facing tough competition from textile hubs in Maharashtra, Andhra Pradesh and Telangana, official said.


The new policy provides for various sops for the textile industry across the value chain. The key among them include 6% credit-linked interest subsidy for micro, small, medium enterprises and between 4%-6% for large units, with an upper ceiling of 200 mln rupees.


The policy also provides for 20% assistance on cost of machinery, with a ceiling of 3 mln rupees and 50% assistance in audit fees up to 100,000 rupees. These benefits can be availed once in two years. 


For technology upgradation and modernisation, the policy provides for a one-time financial assistance of up to 50% cost up to 2.5 mln rupees.


The state has also extended support for setting up textile parks with a financial assistance of up to 25% of the capital expenditure on common facilities and infrastructure up to 150 mln rupees.


Aimed at creating local employment, the scheme makes it mandatory to hire a minimum of 85% of the total manpower of an enterprise and at least 60% of the supervisory and managerial staff to be domiciled in the state.  End


Reported by Sunil Raghu

Edited by Maheswaran Parameswaran


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