Gujarat plans competitive textile policy

After the recent announcement of textile policy for debt

restructuring, apparently going in favor of Tamil Nadu and Maharashtra’s , Gujarat government has decided to take necessary steps towards forming a new policy to attract great investments, that would surely benefit the state’s textile mills to become the main hub for the spinning sector.

Interestingly, many members of spinners` associations from Tamil Nadu have proposed to shift their business to Gujarat in case the government comes with any incentive policy. Also, many cotton traders in Gujarat are willing to set up their own spinning and cotton weaving enterprises.

Although, Tamil Nadu accounts for 54 per cent of all spinning mills of the country, the mills function only at 30 per cent efficiency due to lack of power. Mills equipped with diesel generators are able to increase their efficiency to 50 per cent. Therefore, Gujarat believes that it can be an alternative home for the sector with assured power supply.

Recently, Maharashtra announced a new textile policy aiming to attract an investment of up to Rs 40,000 crores and giving jobs to 11 lakh people by 2017. Gujarat government keeping in mind that Maharashtra has offered 10 per cent capital subsidy and interest subsidy on long-term loan linked to the Centre`s Technology Upgradation Scheme, plans to have a more competitive policy that would also see global centres on public-private-partnership (PPP).

Gujarat produces around 40 per cent of raw cotton and possesses 7 per cent of all spinning mills of the country. "There is clearly a mismatch. Gujarat`s textile sector is able to use just five per cent of the raw cotton produced. Apart from spinning, we are also weak in cotton weaving with just 10 per cent of the country`s figure. Worse, 75 per cent of our 50,000 looms are based on old technology," said an official wishing anonymity.