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Karnataka drafts new textile policy to attract investment

Karnataka drafts new textile policy to attract investment
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First Published: Wed, Jun 04 2008. 10 44 PM IST
Updated: Wed, Jun 04 2008. 10 44 PM IST
Bangalore: Karnataka has drafted a textile policy that expects to attract investments worth Rs10,000 crore and create half a million jobs in five years by offering sops to the industry. The policy is now awaiting approval of the new government.
“The draft policy primarily aims at two aspects: generation of employment in the rural interiors... and invite new investments in the sector,” says A. Anand, joint director at the state’s department of handlooms and textiles.
The textile and readymade garment industry—the second largest employer in the state after information technology—is worth nearly Rs5,000 crore excluding exports, and employs 500,000 workers in and around Bangalore, according to government data.
Industry body Confederation of the Indian Textile Industry estimates that the country exported textiles worth $20.5 billion (Rs87,330 crore) in 2007-08. A breakup for Karnataka is not available.
Some of the largest exporters including Gokaldas Images Pvt. Ltd, Gokaldas Exports Ltd and Himatsingka Seide Ltd are based in the state. With the state aggressively building textile parks, companies such as Bombay Rayon Fashions Ltd, S. Kumars Nationwide Ltd, and Madura Garments have also set up shops in Karnataka.
Girish Kamath, senior manager at IL&FS Cluster Development Initiative Ltd that framed the draft over three months, said the policy aims to make the state “competitive” when pitted against countries such as China. “Textile is an age-old industry and through the policy, the aim is to set up soft infrastructure like a skilled labour force as well as boost physical infrastructure like helping units with technological upgradation.”
The draft suggests giving the industry subsidized electricity, easy employment rules and suitable infrastructure, particularly to start-ups. A long-standing demand for removing entry tax is a part of the draft— a 2% entry tax is now levied on raw and packaging materials in the sector. The draft also proposes textile training centres, particularly in rural Karnataka.
At present, power is subsidized up to 20 horsepower for powerlooms. Textile department officials said the draft has proposed increasing the subsidy, and extending it to readymade garment factories.
The previous government in which the Bharatiya Janata Party, or BJP, was a partner, had earmarked Rs500 crore to implement the policy over five years. The BJP has come into power on its own after last month’s elections in the state.
Dinesh Hinduja, executive director of Gokaldas Exports, said the policy is a must for the state. “There are serious labour issues and the policy needs to address those. We need seasonal labourers, fixed work hours and a trained workforce,” he said.
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First Published: Wed, Jun 04 2008. 10 44 PM IST