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A Year of important Reforms for Ministry of Textiles -2021

Context:

2021 was a year of game changing reforms for the Ministry of Textiles as the Government approved Setting up of 7 Pradhan Mantri Mega Integrated Textile Region and Apparel (MITRA) Parks, announced Production Linked Incentive (PLI) Scheme for Textiles and more in the year 2021.

Relevance:

GS-III: Industry and Infrastructure (Textile Industry, Government Policies and Initiatives, Industrial Policy)

Dimensions of the Article:

  1. Significance of Textile Sector in India
  2. About PM Mega Investment Textiles Parks (PM MITRA) scheme
  3. About the PLI Scheme for textiles sectors
  4. Rebate of State and Central Taxes and Levies (RoSCTL)
  5. Amended Technology Upgradation Fund Scheme (ATUFS)
  6. Samarth Scheme for Textile Sector
  7. Technical Textiles
  8. Silk Samagra
  9. Jute-ICARE
  10. Integrated Wool Development Programme (IWDP)
  11. North-East Region Textile Promotion Scheme (NERTPS)
  12. PowerTex India
  13. Scheme for Integrated Textile Parks (SITP)

Significance of Textile Sector in India

  • The Textile Sector accounts for 7% of India’s manufacturing output, 2% of GDP, 12% of exports and employs directly and indirectly about 10 crore people.
  • Owing to the abundant supply of raw material and labour, India is the largest producer of cotton (accounting for 25% of the global output) and second-largest producer of textiles and garments and man-made fibres (polyester and viscose).
  • India has the unique advantage of the entire value chain for textile production present within the country vis-à-vis other competing nations which have to import fibre, yarn and fabric to meet their requirement for garment production.
  • With direct and indirect employment of close to 105 million people, this industry is the second largest employment generator in the country, next only to agriculture.
  • More significantly, women constitute 70% of the workforce in garment manufacturing and about 73% in Handloom.
  • The domestic textile and apparel production is approx US$ 140 Bn including US$ 40 Bn of Textiles and Apparel export.
  • Availability of almost all types of raw materials, existence of total value chain, young demography of India, entrepreneurial mindset of industry leaders, continuous support of Government, technology up gradation, focus on innovation and strong presence of support industries contribute to helping this sector grow at a healthy pace.

About PM Mega Investment Textiles Parks (PM MITRA) scheme

  • The PM Mega Investment Textiles Parks (PM MITRA) scheme was launched in 2020 with a plan to establish Seven textile parks which will have a world-class infrastructure over three years.
  • These parks will also have plug-and-play facilities (business facilities will be available ready-made) to help create global champions in exports in the textile sector.

Aims and Significance of MITRA

  • The Mega Investment Textiles Parks (MITRA) Scheme aims to enable the textile industry to become globally competitive and boost exports.
  • The scheme also aims to boost employment generation within the textile sector and also attract large investment.
  • The scheme was launched in addition to the Production Linked Incentive (PLI) Scheme.
  • The scheme will create a level-playing field for domestic manufacturers in the international textiles market.
  • It will also pave the way for India to become a global champion of textiles exports across all segments.
  • MITRA will lead to increased investments and enhanced employment opportunities with the support from the Production Linked Incentive (PLI) scheme.

About the PLI Scheme for textiles sectors

  • Production Linked Incentive (PLI) Scheme for Textiles is specially focused at high value and expanding MMF and Technical Textiles segments of Textiles Value Chain. Incentives worth Rs. 10,683crore will be provided over five years for manufacturing notified products of MMF Apparel, MMF Fabrics and segments/products of Technical Textiles in India.

Expected Benefits

  • The scheme could aid in the creation of 7.5 lakh direct jobs. The textile sector is an employment intensive sector and the investment in the textile sector would have a multiplier effect on the Indian economy especially in job creation.
  • Two-thirds of India’s textile exports now are cotton-based whereas 66-70% of world trade in textiles and apparel is MMF-based and technical textiles. The PLI incentives aim to boost investment in new capacities in man-made fibre (MMF) apparel, MMF fabrics, and 10 segments or products of technical textiles.
  • India’s focus on the manufacture of textiles in the MMF sector is expected to help boost its ability to compete globally in the textiles market.
  • Given that priority would be given for investment in aspirational districts, tier-three, tier-four towns and rural areas, the new scheme would promote balanced regional development.
  • The textiles industry predominantly employs women, therefore, the scheme will empower women and increase their participation in the formal economy.
  • In addition, priority will be given for investment in Aspirational Districts, Tier 3, Tier 4 towns, and rural areas and due to this priority, Industry will be incentivized to move to backward areas. This scheme will positively impact especially States like Gujarat, UP, Maharashtra, Tamil Nadu, Punjab, AP, Telangana, Odisha etc.

Rebate of State and Central Taxes and Levies (RoSCTL)

  • RoSCTL was offered for embedded state and central duties and taxes that are not refunded through Goods and Services Tax (GST).
  • It was introduced by the Ministry of Textiles and was available only for garments and made ups.

Amended Technology Upgradation Fund Scheme (ATUFS)

  • The Technology Upgradation Fund Scheme was introduced by the Government in 1999 to facilitate new and appropriate technology for making the textile industry globally competitive and to reduce the capital cost for the textile industry.
  • In 2015, the government approved “Amended Technology Upgradation Fund Scheme (ATUFS)” for technology upgradation of the textiles industry.

Samarth Scheme for Textile Sector

Samarth Scheme, also known as Scheme for Capacity Building in the Textile Sector (SCBTS) was launched in order to ensure steady supply of skilled manpower in the labour-intensive textile sector.

The objectives of Samarth Scheme for textile sector are:

  1. Provide demand driven, placement oriented National Skills Qualifications Framework (NSQF) compliant skilling programmes to create jobs in the organized textile and related sectors, covering the entire value chain of textile, excluding Spinning and Weaving.
  2. Promote skilling and skill upgradation in the traditional sectors of handlooms, handicrafts, sericulture and jute.
  3. Enable provision of sustainable livelihood either by wage or self-employment.

Technical Textiles

  • The Technical Textiles segment is a new age textile, whose application in several sector of economy, including infrastructure, water, health and hygiene, defense, security, automobiles, aviation will improve the efficiencies in those sectors of economy.
  • Government has also launched a National Technical Textiles Mission for promoting R&D efforts in that sector.

Silk Samagra

  • The central sector scheme “Silk Samagra” provides R & D/ Seed support, technical and financial assistance for enhancing the quality and production of silk.
  • The main focus of the scheme is to make India Atma nirbhar in production of international grade bivoltine silk and scale up the Automatic Reeling Machine. Brand “Indian Silk” is promoted through Product Development & Diversification to address the global market need.
  • India’s traditional and culture bound domestic market and an amazing diversity of silk garments help the country to achieve a leading position in silk industry. India is the second largest producer of silk next to China and contributes about 32% of global silk production.

Jute-ICARE

  • Jute-ICARE (Improved Cultivation and Advanced Retting Exercise) scheme has been implemented for improvement of quality and yield of raw jute production. Jute Raw Material Bank (JRMB) Scheme is for supplying jute raw materials at Mill Gate Price to MSME JDP units for production of jute diversified products,

Integrated Wool Development Programme (IWDP)

  • Ministry of Textiles has approved rationalization and continuance of Integrated Wool Development Programme (IWDP) from 2021-22 to 2025-26 with total financial allocation of Rs. 126 Crore.   ‘Wool Processing Scheme’ is for promotion of woolen industry.

North-East Region Textile Promotion Scheme (NERTPS)

  • The NERTPS scheme was launched by the Union Textile Ministry. Under this intervention, each state now has one centre with three units having approximately 100 machines each.
  • The broad objective of the North East Textile Promotion Scheme is to develop and modernise the textile sector in the North East Region by providing the required Government support in terms of raw material, seed banks, machinery, common facility centres, skill development, design and marketing support etc.
  • The specific objectives of the scheme include increase in the value of textile production, technology upgradation, improvement in design capability, diversification of product lines and value addition, better access to domestic and export markets, clusterisation and improvement in labour productivity, market access & market promotion.

PowerTex India

  • PowerTex India was launched by the Ministry of textiles as a comprehensive scheme for power loom sector development.
  • PowerTex India scheme comprises new research and development in power loom textiles, new markets, branding, subsidies and welfare schemes for the workers.
  • Under Pradhan Mantri Credit Scheme (PMCS) for powerloom weavers’ financial assistance, including margin money subsidy and interest reimbursement, will be given as against the credit facility under Pradhan Mantri Mudra Yojana to the decentralised power loom units.
  • Under Solar energy scheme (SEC) for powerlooms financial subsidy for the installation of the Solar Photo Voltaic Plants will be provided to alleviate the problems of power cuts.

Scheme for Integrated Textile Parks (SITP)

  • Scheme for Integrated Textile Parks (SITP) was launched in 2005 to provide the industry with world-class state of the art infrastructure facilities for setting up their textile units and to attract foreign investors to the domestic textile sector.
  • Under the SITP, infrastructure facilities for setting up of textile units are developed in a Public-Private-Partnership (PPP) model.
  • The Government of India grants upto 40% of the project cost, however, it grants upto 90% of the project cost for the first two projects (each) in the North Eastern States, Himachal Pradesh, Uttarakhand and Union Territory of Jammu & Kashmir and Union Territory of Ladakh.

-Source: PIB

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