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Business News/ Industry / Maharashtra announces capital subsidy for self-financed textile units
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Maharashtra announces capital subsidy for self-financed textile units

In addition, self-financed textile units in Vidarbha, Marathwada, and North Maharashtra regions will also be eligible for 25-35% capital grants from the state

A farmer picks cotton in a field in Maharashtra. Photo: AFPPremium
A farmer picks cotton in a field in Maharashtra. Photo: AFP

Mumbai: The Maharashtra government has extended a capital subsidy currently offered only to textile units that have taken bank loans to those that are self-financed as well.

Textiles minister Chandrakant Patil announced the policy to revive the sector at a panel discussion on opportunities in textiles in Maharashtra at the Make in India week.

In addition, self-financed textile units in Vidarbha, Marathwada, and North Maharashtra regions—which produce almost all of the state’s cotton—will also be eligible for 25-35% capital grants from the state.

Sunil Porwal, additional chief secretary for textiles, suggested the government of India should also implement a similar measure at the national level to revive the ailing textiles units.

“Maharashtra has come out with this policy to incentivise textile industrialists who are ready to put in their own money in their units. The problem of stressed assets has been caused because there has not been a disincentive to take credit and an incentive to self-finance," Porwal said.

“This policy to incentivise self-finance makes sure that the promoter’s equity is raised."

Dilip Jiwrajka, managing director of Alok Industries, which operates four textile units in the Maharashtra, welcomed the initiative. He said textile units in the state should also get cheaper electricity like in neighbouring Gujarat.

R.K. Dalmiya, chairman of the Cotton Textiles Export Promotion Council, said the initiative will give Maharashtra a competitive edge over other textile-heavy state like Tamil Nadu.

Industry minister Subhash Desai said the Maharashtra Industrial Development Corporation (MIDC) was setting up 10 integrated textile parks in the state. “We are developing these parks in Vidarbha, Marathwada and North Maharashtra where cotton is produced. We are targeting an investment of 40,000 crore in these parks which would generate more than 11 lakh jobs," Desai said.

The state government has reduced the premium on MIDC land to encourage investors to invest in these parks, Desai said. One of these parks has come up at Nandgaon Peth in Amravati district in Vidarbha where Raymond Industries has signed an agreement for an investment of 1400 crore.

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Published: 15 Feb 2016, 01:24 AM IST
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