Govt considers providing tax benefits, marketing support for powerloom sector

index.jpgSource: The Economic Times, Nov 15, 2016

NEW DELHI: A mega package for the powerloom sector is in the works, focused on upgrading units. The package will include social welfare schemes, insurance cover and cluster development of power looms.

This would be the second in a series of incentives for the textile sector, after a Rs 6,500 crore package announced for garments in June. At present, less than 2 lakh power looms of the total 25 lakh are technologically upgraded.

“We want to better the status of power loom weavers and a certain set of incentives and social security schemes is being worked out. Power loom workers want financial incentives and loans because they don’t have working capital,” said an official privy to the details.

India’s power loom sector employs almost 65 lakh people. “Their cost of production is high, which has rendered them uncompetitive… tax benefits and marketing support are being considered,” the official added. At present, the units get a capital subsidy to switch over to new shuttle-less looms.

Under the scheme for in-situ upgrading of power looms, units get Rs 15,000 as subsidy for semiautomation. The government may also offer loans through the Micro Units Development & Refinance Agency Ltd. (MUDRA).

The package is being considered as power looms in Maharashtra and Gujarat operate at sub-optimal capacities. High input costs and reduced purchases of fabrics have resulted in the partial stoppage of power looms in some clusters.

“Power looms, which give 70% of the total jobs in the textile industry, deserve financial support. We request the government to come out with a package similar to garments,” said an industry expert.

Though MUDRA loans will benefit small units that are going in for simple automation, textile expert DK Nair said efforts should be made to consolidate them. “Small units should be discouraged from remaining small,” the expert said.

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