‘Incentives for first movers to textile parks’
2 min read 26 Mar 2023, 11:01 PM ISTThe textile parks will be developed by an SPV which will be owned by the state government and Centre
PremiumNEW DELHI : Factories that are the first to set up at textile mega-parks will get incentives of 3% of their revenue, textile secretary Rachna Shah said.
The mega-parks, announced under the ₹4,445-crore PM Mega Integrated Textile Regions and Apparel (PM MITRA) scheme are to come up in Tamil Nadu, Telangana, Gujarat, Karnataka, Madhya Pradesh, Uttar Pradesh and Maharashtra.
“The Centre will be providing the incentive support to the manufacturing factories that would come in first -- the first movers. They will be incentivized to the tune of 3% of the revenue. Suppose there is an anchor investor, who brings in investment of ₹300 crore to a park, then there will be an incentive that can be ₹10 crore per year with a cap of ₹30 crore," Shah said in an interview.
Moreover, the Union government has discussed a stable power regime for the textile parks and the state’s attitude toward the proposed four labour codes that aim to facilitating ease of doing business by replacing 29 laws.
Changes in labour laws are expected to have a major bearing on the mega parks as textile is a labour intensive sector. The parks alone are expected to employ 2 million workers.
The Economic Survey had stated that new laws are in tune with the changing labour market trends and, at the same time, accommodate the minimum wage requirement and welfare needs of unorganized workers, including self-employed and migrant workers.
The secretary said issues related to the availability of reliable power supply and the quality of power is important for any industrial park and the central government has had discussions about this with the states.
“We’ve discussed in detail with the states about their industrial policy and their textile policy and whether they would be offering any special incentives. Most of the states have their own policy framework for assured power and water supply," she added.
On the proposed labour laws, the official said the Centre has had discussions with the states in terms of their acceptability.
“We have taken note of their existing labour policies as well as their attitude to the four labour codes," Shah added.
The mega-parks will be developed by a Special Purpose Vehicle (SPV) which will be owned by the state government and Centre in a public private partnership (PPP) mode.
The textiles ministry had notified setting up of seven mega textile PM MITRA parks on 21 October 2021 after it was announced in Union Budget for 2021-22.
The scheme is aimed at developing an integrated large-scale and modern industrial infrastructure facility for the textile industry. It is expected to reduce logistics costs and improve competitiveness of Indian textiles facing competition from countries such as Bangladesh and Vietnam. The textile sector also has been among the top focus areas of the government in the free trade agreements that India is negotiating with various countries.
India has negotiated zero duty access for textile exports in the trade deals with UK and EU which could help boost domestic production.
