FICCI’s Suggestions on West Bengal’s Textiles Policy ...ficci.in/SEdocument/20216/ficci-policy-for-west-bengal-textile.pdf · 4 | FICCI’s Suggestions for West Bengal’s Textiles

FICCI’s Suggestions onWest Bengal’s Textiles Policy - 2022

December 2012

CONTENTS PAGE

Textiles Industry in West Bengal 3

State Government’s Initiatives for the Sector 5

Advantages in West Bengal 5

Challenges and Current Issues for Textiles Industry in West Bengal 5

Vision for the State’s Textiles Industry 5

Comparative Analysis of Textile Policies of Major States 8

Way Forward for Textiles Industry in West Bengal 14

2 | FICCI’s Suggestions for West Bengal’s Textiles Policy-2022

December 2012 | 3

A. Textiles Industry in West Bengal

West Bengal has a long history and tradition in textiles. The sector still provides employment, both

directly and indirectly to a large number of people in the State. However, individual units apart, the

State’s textiles sector is now lagging behind other States like Karnataka, Gujarat, Tamil Nadu, Haryana,

Maharashtra and Rajasthan. This is not to say that the State has lost the potential. The State has the

potential to revive its textiles industry and be a major part of global value chain in this sector where

global exports were worth $706 billion and registered a growth of 17% in 2011, with Bangladesh

registering a highest growth of 27%. Besides, developed countries have lost competitiveness in

textiles industry and are trying to relocate their activities in developing countries like India which has

large domestic market also.

Traditionally, Handlooms, Powerlooms, Hosiery, Jute and Silk are the major segments of West Bengal’s

textiles industry. Though late, but readymade garment segment has also got some base in the State.

It is estimated that more than 1.5 million people are employed by textiles industry in West Bengal.

This is just the direct employment and there would be another half a million people dependent on

this sector indirectly. Given below is the current status of West Bengal Textiles industry (2009-10).

Segment Number of Units Production Employment

Handlooms 3,07,829 893.76 Million Mtrs. 6,65,006

Powerlooms 10,050 120.6 Million Mtrs. 2,21,100

Hosiery 17900 176 Million Kg 1,10,000

Jute 64 (Composite Mills) 7225 thousand Bales (180 Kg/bale) 2,60,000

Silk NA NA 1,00,000

Readymade Garments 21251 490 Million Pieces 2,00,000

Source: Government of West Bengal

Cotton Textile Industry

• The State has traditional industrial base

• Production of cotton yarn increased by 5.68% to 289.36 lakh kg. in 2009-10

• Production of cotton cloth increased by 8.66% to 40.25 lakh metres in 2009-10

• 3,07,829 handlooms employing 6,65,006 persons produced 893.76 M. Mts in 2009-10

• 10,050 powerlooms employing about 2,21,100 persons produced 120.60 million sq. mtr of cloth

in 2009-10


Hosiery Industry

• West Bengal is the birth place of hosiery industry in India

• 1st hosiery factory established at Kidderpore more than a century ago

• Mainly located in Kolkata, Howrah, South 24 Parganas

• Maintained its position as the hub of hosiery goods manufacturing & trade

• Has 17900 hosiery units, employs around 1.1 lakh persons and produced 176 million

Kg of hosiery cloth in 2009-10

Readymade Garments sector

• The sector with 21251 units employed around 2 lakh persons with a production of 490 million

pcs. in 2009-10

• Clusters for readymade garments in Jaldhaka and Paharpur in Jalpaiguri district employed about

312 and 401 artisans respectively in 2009-10

Sericulture

• The State has unique distinction of producing all 4 commercially exploited varieties of silk –

Mulberry, Tasar, Eri and Muga

• Provides employment to more than 1 lakh families in rural and semi-urban areas

• Under Cluster Promotion Programme, the Central Silk Board in close co-ordination with DOSs

assist 3 pre-cocoon and 1 post-cocoon sericulture clusters in the State

Jute Industry

• West Bengal is the leading manufacturer of Jute textiles

• The state is the largest in India in 2009-10 in terms of -

¾ Area of production (499.6 thousand hect)

¾ Production (7225 thousand bales of 180kg/bale)

¾ Productivity (14.46 qtl/hect.)

• 64 among 83 composite existing jute mills in India are located in West Bengal – mostly on the

banks of river Hooghly near Kolkata

• Export of jute products during 2009-10 was 110.5 th MT valued at Rs. 844.70 crore

• State Jute industry provides direct employment to 0.26 million workers and supports the

livelihood of around 4 million farm families

Technical Textiles

• West Bengal has number of players in industrial garment segment and it has the potential

to scale it up. Similarly, the State has potential in coated fabrics for various applications (For

instance, large quantity of umbrellas are manufactured in the State which require coated

fabrics). Technical textiles industry in India is today growing at the rate of over 11% per annum.

December 2012 | 5

B. State Government’s Initiatives for the Sector• The State has a Directorate of Textiles, which is implementing a number of developmental and

welfare schemes of the State and Central Government.

• The State also has a Textiles Policy 2007-2012 to fulfill the twin objectives of (i) taking the

sectoral contribution to the State GDP to 10% and (ii) creating additional direct and indirect

sustainable employment of 1 million people by the year 2012.

C. Advantages in West Bengal• Substantial producer of chemicals, local dyes

• Availability of power

• Availability of cheap labour

• Large pool of workers traditionally trained in jute cultivation

• Easy export facility due to presence of port and airport

• Huge market, not only in India but different parts of the world especially Bangladesh and South

East Asia due to trade agreements with these countries/regions.

D. Challenges and Current Issues for Textiles Industry in West Bengal• Technological backwardness of units

• Sub-optimal and low volumes of operations

• Disconnect with large emerging markets within and outside the country

• Low labour productivity

• Archaic labour laws

• Limited raw material and intermediate product base within the State (like cotton, yarn etc)

• Lack of training and skill development institutes

E. Vision for the State’s Textiles Industry• There is a need for an ambitious long term textiles policy for West Bengal. Currently, the State

has Textiles Policy 2007-12 which is not adequate for realizing true potential of textiles in the

State.

• In terms of size, as per Annual Survey of Industries, the total production size of textiles

industry in West Bengal is around $2.9 billion which is 5.24% of total size of Indian textiles

industry’s output in 2009-10. Looking at other States, Tamil Nadu is leading with 21.5% share,

Maharashtra with 12.7% and Gujarat with 12.5% share.


Table: Size of Textiles Industry in India and States- 2009-10

India West Bengal Gujarat Tamil Nadu Maharashtra

Total Rs Lakh 26141580 1371773 3284045 5645961 3336039

Total ($bn) 55.15 2.89 6.92 11.90 7.03

Share (%) 5.24 12.55 21.58 12.74

Source: Annual Survey of Industries

• According to Annual Survey of Industries, in 2000-01 the size of West Bengal Textiles industry

was $ 1.2 billion. Implying that in a period of ten year i.e. from 2000-01 to 2009-10 the West

Bengal’s textiles industry grew by CAGR of 9.2%. Government of India has set the growth

target of around CAGR of 11.5% for twelfth five year plan for textiles. In view of the past growth

trends in the State and target for 12th Five Year Plan, following targets are being suggested for

the West Bengal’s Textiles Policy 2022-23:

¾ Doubling the share of West Bengal’s textiles industry from the current 5.2% to at least 10%

in next ten years i.e. by 2022-23 in India’s textiles industry

¾ The expected and required rate of growth to achieve the above targeted share would be

17.2% assuming that Indian textiles industry grow at the rate of 11.5% for next eleven years.

This would mean doubling the growth also of the sector in the State from the current levels.

Table: Size of Textiles Industry ($ billion)

IndiaWest Bengal Textiles Industry Size

@9.24% CAGRWest Bengal Textiles Industry's Targeted Size @ 17.2% CAGR

2012-13 72.66 3.77 4.65

2013-14 81.01 4.12 5.45

2014-25 90.33 4.50 6.39

2015-16 100.72 4.91 7.49

2016-17 112.30 5.36 8.78

2017-18 125.21 5.86 10.29

2018-19 139.61 6.40 12.06

2019-20 155.67 6.99 14.13

2020-21 173.57 7.64 16.56

2021-22 193.53 8.35 19.41

2022-23 215.79 9.12 21.58

Source: FICCI Calculation based on ASI data

December 2012 | 7

• Looking at the number of people employed in the State in the sector, there are almost fifty

people employed for every Rs 100000/- of output. Assuming the proportion of output to labour

employment remains same in the State in textiles sector, then by 2022-23 i.e. in next ten years if

the State is able to increase its industry size as targeted above, then it would provide employment

to at least 10 million people. Out of this at least 75% would be in the unskilled and semi-skilled

level if one goes by national yardstick. This means that the sector has a huge potential in the State

to provide employment to large number of people. This is to some extent also mentioned in the

NSDC (National Skill Development Corporation) Report on Textiles and Clothing, which says that

the major centers in India which will drive employment generation in textiles are Tamil Nadu,

West Bengal, Karnataka, Maharashtra, and Gujarat in next ten to twelve years. The state of West

Bengal will account for around 11% of the employment in the textile sector.


F. C

om

par

ativ

e A

nal

ysis

of T

exti

le P

olic

ies

of

Maj

or

Sta

tes

Sta

te/

Mea

sure

Gu

jara

tK

arn

atak

aTa

mil

Nad

uM

ahar

ash

tra

Wes

t B

enga

l

Polic

yG

uja

rat T

exti

le P

olic

y 20

12S

uva

ran

Vas

tra

Nee

thi

2008

-201

3Po

licy

No

te 2

012-

13, H

and

loo

ms

and

Te

xtile

s

Text

iles

Polic

y o

f

Mah

aras

htr

a 20

11-1

7Te

xtile

s Po

licy

20

07-1

2

Cap

ital

Su

bsi

dy

Guj

arat

Text

iles

Polic

y pr

ovid

es fo

r in

tere

st s

ubsi

dy

and

also

for

tech

nolo

gy

acqu

isiti

on a

nd u

pgra

datio

n.

The

inte

rest

sub

sidy

will

be

in a

dditi

on t

o th

at p

rovi

ded

by G

OI.

Max

imum

inte

rest

su

bsid

y w

ill b

e at

the

rat

e of

5%

per

ann

um (7

% fo

r sp

inni

ng u

nit

and

garm

ent/

mad

e-up

uni

ts a

nd 6

%

for

tech

nica

l tex

tiles

). Th

is

subs

idy

is fo

r in

vest

men

t in

ne

w a

nd m

oder

n pl

ant

and

mac

hine

ry a

s sp

ecifi

ed in

TU

F sc

hem

e of

GO

I. Th

e in

tere

st s

ubsi

dy is

for

perio

d of

fiv

e ye

ars

or fo

r th

e pe

riod

of r

epay

men

t w

hich

ever

is

earli

er.

For

tech

nolo

gy a

cqui

sitio

n,

finan

cial

ass

ista

nce

of u

pto

50%

of

the

inve

stm

ent

with

m

axim

um o

f R

s 25

lakh

s pe

r pr

oces

s/pr

oduc

t on

ce

durin

g op

erat

ive

perio

d of

th

e sc

hem

e

Kar

nata

ka p

rovi

des

cred

it lin

ked

capi

tal

subs

idy

on t

he b

asis

of

des

igna

ted

zone

s.

Hig

her

subs

idie

s fo

r m

ore

back

war

d re

gion

s. G

iven

bel

ow is

th

e m

axim

um s

ubsi

dy

prov

isio

n.

a) G

ener

al20

% o

n th

e va

lue

of

fixed

ass

ets

orR

s.20

.00

lakh

s,w

hich

ever

is le

ss

b) A

dd

itio

nal

su

bsi

dy

(i) U

nits

with

in

Des

igna

ted

Text

ile

Park

s5%

on

the

valu

e of

fixed

ass

ets

or R

s.5.

00

lakh

s,w

hich

ever

is le

ss.

(ii) S

C/S

T/Pe

rson

sw

ith d

isab

ilitie

s/M

inor

ity/E

xser

vice

men

/W

omen

5% o

n th

e va

lue

offix

ed a

sset

s or

Rs.

5.00

la

khs,

whi

chev

er is

less

.

No

such

sch

eme

exce

pt 4

% in

tere

st

subs

idy

for

prim

ary

wea

vers

’ coo

pera

tive

soci

etie

s on

the

rat

es

char

ged

by D

istr

ict

Cen

tral

Coo

pera

tive

Ban

ks.

Equ

ity s

uppo

rt in

the

spe

cifie

d ra

tio fo

r co

oper

ativ

e sp

inni

ng

mill

s an

d pr

ojec

ts o

f co

oper

ativ

e so

ciet

ies

in p

ower

loom

s,

wea

ving

, war

ping

, siz

ing,

Dye

ing,

Pr

intin

g, G

arm

entin

g, K

nitt

ing

etc.

10%

cap

ital s

ubsi

dy fo

r ne

w

text

ile p

roje

cts

in V

idar

bha,

M

arat

hwad

a an

d N

orth

M

ahar

asht

ra.

Als

o, in

tere

st s

ubsi

dy fo

r ne

w

text

ile p

roje

ct o

n lo

ng t

erm

loan

lin

ked

to c

entr

ally

spo

nsor

ed

TUFS

.

For

mod

erni

zatio

n of

pow

erlo

om

units

of

Sch

edul

ed C

aste

s,

Sch

edul

ed Tr

ibes

and

Min

oriti

es,

sanc

tione

d by

Ban

k’s

a sc

hem

e to

give

10%

cap

ital s

ubsi

dy o

f th

e ca

pita

l inv

estm

ent

[i.e.

10%

of

the

perm

issi

ble

inve

stm

ent

for

the

purp

ose

of

inte

rest

sub

sidy

for

proj

ects

w

hich

are

app

rove

din

TU

FS] o

n m

achi

nery

, bes

ides

th

e co

nces

sion

s re

ceiv

ed f

rom

ot

her

sour

ces,

No

such

sch

eme

of

Sta

te G

over

nmen

t in

th

e po

licy.

December 2012 | 9

Sta

te/

Mea

sure

Gu

jara

tK

arn

atak

aTa

mil

Nad

uM

ahar

ash

tra

Wes

t B

enga

l

Pow

er S

ub

sid

yPo

wer

tar

iff s

ubsi

dy @

R

s 1

per

unit

for

a pe

riod

of f

ive

year

s fo

r co

tton

sp

inni

ng a

nd w

eavi

ng

units

. Thi

s is

onl

y fo

r un

its

purc

hasi

ng e

lect

ricity

fro

m

the

Sta

te e

lect

ricity

/pow

er

dist

ribut

ion

licen

see.

Rei

mbu

rsem

ent

of c

ost

of p

ower

pai

d @

R

s.1.

00 p

er u

nit

for:

(i) R

eady

mad

e ga

rmen

t un

its(ii

) Hi-t

ech

Pow

erlo

om u

nits

with

pow

er

conn

ectio

n ab

ove

20 H

P(ii

i) S

pinn

ing

units

Han

dloo

m w

eave

rs a

re

bein

g pr

ovid

ed 1

00 u

nits

bi-

mon

thly

at

free

of

cost

.Fr

ee p

ower

sup

ply

upto

50

0 un

its fo

r po

wer

loom

sh

ed o

n bi

-mon

thly

bas

is

No

such

sub

sidy

in

the

polic

yN

o su

ch

subs

idy

in

the

polic

y

Lan

d A

cqu

isit

ion

No

such

sub

sidy

in t

he

polic

yR

eim

burs

emen

t of

25%

of

the

cost

of

land

in

clud

ing

acqu

isiti

on c

harg

es, i

f an

y, a

s ch

arge

d by

KIA

DB

/ K

SS

IDC

or

Rs.

25.0

0 la

khs,

whi

chev

er is

less

for

Zone

1 fo

r ba

lanc

ed r

egio

nal d

evel

opm

ent

No

such

sub

sidy

in t

he

polic

yN

o su

ch s

ubsi

dy in

th

e po

licy

No

such

su

bsid

y in

th

e po

licy

Sta

mp

Du

ty

Rei

mb

urs

emen

tTh

e de

velo

per

of t

extil

es

park

and

ent

erpr

ises

in

the

park

will

be

elig

ible

fo

r ex

empt

ion

of s

tam

p du

ty o

n pu

rcha

se o

f la

nd

requ

ired

for

the

new

par

k as

app

rove

d by

SLA

C

Max

imum

of

full

reim

burs

emen

tw

ith r

espe

ct t

o :

(i) E

xecu

tion

of L

ease

, Lea

se-c

um-s

ale

and

Sal

e de

eds

in r

espe

ct o

f in

dust

rial l

and

/ pl

ots

allo

tted

.(ii

) Exe

cutio

n of

Lea

se D

eeds

in c

ase

of

indu

stria

l she

ds /

plot

s ta

ken

on L

ease

.(ii

i) Lo

an a

nd c

redi

t de

eds,

incl

udin

g se

curit

y do

cum

ents

suc

h as

mor

tgag

e de

ed, p

ledg

e de

ed e

tc.,

exec

uted

for

avai

ling

long

ter

m

fund

s fr

om b

anks

/ FI

s an

d ot

her

agen

cies

of

GoK

/GoI

.

(iv) U

se-o

n S

tam

p D

uty

paid

on

Impo

rts

No

such

sub

sidy

in t

he

polic

yN

o su

ch s

ubsi

dy in

th

e po

licy

No

such

su

bsid

y in

th

e po

licy


Sta

te/

Mea

sure

Gu

jara

tK

arn

atak

aTa

mil

Nad

uM

ahar

ash

tra

Wes

t B

enga

l

VA

T/E

ntr

y Ta

x R

eim

bu

rsem

ent

Ref

und

of V

AT p

aid

by t

he u

nit

on

purc

hase

s of

inte

rmed

iate

pro

duct

/ra

w m

ater

ial e

xcep

t fo

r ce

rtai

n go

ods

and

cert

ain

tran

sact

ions

whi

ch a

re n

ot

elig

ible

for

tax

cred

it un

der T

he G

ujar

at

VAT

Act

, 200

3 an

d re

mis

sion

of

tax

colle

cted

on

end

prod

uct

/inte

rmed

iate

pr

oduc

t w

ithin

ent

ire v

alue

cha

in f

rom

co

tton

to

Gar

men

t an

d m

ade

ups

to t

he e

xten

t of

100

% t

he e

ligib

le

fixed

cap

ital i

nves

tmen

ts in

pla

nt a

nd

mac

hine

ry m

ade

with

in o

ne y

ear

(tw

o ye

ars

in c

ase

of in

vest

men

t m

ore

than

50

0 cr

ores

) fro

m t

he d

ate

of p

rodu

ctio

n or

dur

ing

the

oper

ativ

e pe

riod

of t

he

sche

me

whi

chev

er is

ear

lier.

This

co

nces

sion

will

be

avai

labl

e w

ithin

8

year

s fr

om t

he d

ate

of t

he p

rodu

ctio

n.

Max

imum

of

full

reim

burs

emen

t on

P

lant

& M

achi

nery

an

d C

apita

l Goo

ds

incl

udin

g eq

uipm

ents

fo

r ca

ptiv

e po

wer

ge

nera

tion

and

for

Com

mon

Eff

luen

t Tr

eatm

ent

and

was

te

disp

osal

faci

litie

s.

No

such

sub

sidy

in t

he p

olic

yN

o su

ch

subs

idy

in

the

polic

y

No

such

sub

sidy

in t

he

polic

y

Co

mm

on

E

fflu

ent

Trea

tmen

t P

lan

t an

d o

ther

en

viro

nm

ent

rela

ted

sc

hem

es

For

com

mon

eff

luen

t tr

eatm

ent

plan

t,

subs

idy

is a

vaila

ble

unde

r cl

uste

r/te

xtile

s pa

rk d

evel

opm

ent

sche

me

In a

dditi

on, G

ujar

at h

as a

sch

eme

know

n as

ass

ista

nce

for

Ene

rgy

Con

serv

atio

n, W

ater

Con

serv

atio

n an

d E

nviro

nmen

tal C

ompl

ianc

e to

exi

stin

g un

its h

avin

g in

ope

ratio

n fo

r m

ore

than

thr

ee y

ears

. 7.1

.2 Q

uant

um o

f A

ssis

tanc

e(i)

Ass

ista

nce

up t

o 50

%, M

ax R

s.

50,0

00 fo

r E

nerg

y A

udit/

Wat

er A

udit!

E

nviro

nmen

tal C

ompl

ianc

e w

hich

will

be

app

licab

le in

eac

h ca

se s

epar

atel

y.(ii

) Ass

ista

nce

up t

o 20

% o

f co

st

of e

quip

men

ts, M

ax R

s. 2

0 la

khs

whi

ch w

ill b

e ap

plic

able

in e

ach

case

se

para

tely

.(ii

i) Th

e en

terp

rises

will

be

elig

ible

for

the

abov

e be

nefit

onc

e in

2 y

ears

of

oper

atin

g pe

riod

of t

he s

chem

e

(a) 5

0% o

f th

e pr

ojec

t co

st o

r R

s.5.

00

cror

es, w

hich

ever

is

less

.

(b) I

n ca

se o

f pr

ojec

ts

fund

ed u

nder

any

G

oI s

chem

e –2

0%

of p

roje

ct c

ost

or

Rs.

2.00

cro

res,

w

hich

ever

is le

ss.

18 C

omm

on E

fflu

ent

Trea

tmen

t P

lant

s ha

ve b

een

esta

blis

hed

at a

cos

t of

Rs.

742.

93

cror

e, t

o tr

eat

the

efflu

ents

bei

ng le

t ou

t by

the

dyei

ng u

nits

in T

irupp

ur a

rea.

The

S

tate

Gov

ernm

ent

acce

ded

to t

he

requ

est

of t

he T

irupp

ur d

ye h

ouse

ow

ners

for

exte

ndin

g a

help

ing

hand

to

tho

se w

ho h

ad s

et u

p C

omm

on

Eff

luen

t Tre

atm

ent

Pla

nts

at a

hug

e co

st. W

ith a

n ai

m o

f re

duci

ng t

he

loan

bur

den,

the

Gov

ernm

ent

had

anno

unce

d a

sum

of

Rs.

320

cror

e du

ring

the

year

200

9-20

10

as f

inan

cial

ass

ista

nce.

On

this

the

C

entr

al G

over

nmen

t sh

are

is R

s.20

0 cr

ore

and

the

Sta

te G

over

nmen

t sh

are

is R

s.12

0 cr

ore.

No

such

m

easu

re in

th

e po

licy

Gov

ernm

ent

aim

ed a

t se

ttin

g up

thr

ee ju

te

park

s in

the

Sta

te u

nder

th

e po

licy

to p

rinci

pally

em

erge

as

foca

l poi

nts

for

dive

rsifi

ed a

ctiv

ities

. Th

e pa

rks

wer

e to

be

set

up in

pub

lic -p

rivat

e pa

rtne

rshi

p m

ode

with

a

spec

ial p

urpo

se v

ehic

le

driv

en b

y en

trep

rene

urs

at t

he h

elm

. Jut

e pa

rks

wou

ld h

ouse

larg

e,

med

ium

and

sm

all-

scal

e un

its a

nd p

rovi

de

wor

ld -c

lass

phy

sica

l in

fras

truc

ture

incl

udin

g de

velo

ped

indu

stria

l pl

ots,

roa

d ne

twor

k,

com

mon

eff

luen

t pl

ant

etc.

December 2012 | 11

Sta

te/

Mea

sure

Gu

jara

tK

arn

atak

aTa

mil

Nad

uM

ahar

ash

tra

Wes

t B

enga

l

Co

mm

on

In

fras

tru

ctu

re/

Text

ile P

ark/

Clu

ster

D

evel

op

men

t

The

park

will

be

prov

ided

fin

anci

al

assi

stan

ce o

f up

to

50%

,with

m

axim

um li

mit

of R

s. 1

0 cr

ore

(Rs.

30 c

rore

s fo

r S

pinn

ing

park

) of

tota

l pro

ject

cos

t fo

r es

tabl

ishi

ng

com

mon

in

fras

truc

ture

fa

cilit

ies,

exc

ludi

ng

land

cos

t.

Com

mon

infr

astr

uctu

re fo

r G

reen

field

Text

ile P

arks

- 40%

of

the

pro

ject

cos

t or

Rs.

12.0

0 cr

ores

, whi

chev

er is

less

.

For

SIT

P a

ppro

ved

Proj

ects

9%

of

the

proj

ect

cost

or

Rs.

5.00

cro

res,

w

hich

ever

is le

ss.

The

Clu

ster

dev

elop

men

t Pr

ogra

mm

e ap

proa

chfo

cuse

s on

form

atio

n of

w

eave

rs’ a

s a

grou

p to

en

able

them

ach

ieve

sel

f su

stai

nabi

lity.

Und

er t

his

sche

me

tode

velo

p th

e ha

ndlo

om

clus

ters

pos

sess

ing

300

to 5

00lo

oms,

fin

anci

al a

ssis

tanc

e up

to

Rs.

60 la

kh is

bei

ng

prov

ided

for

each

clu

ster

ov

er a

per

iod

of 3

yea

rs.

Fina

ncia

l ass

ista

nce

unde

r th

is s

chem

e is

pro

vide

d fo

rva

rious

com

pone

nts,

suc

h as

Ski

ll U

pgra

datio

n,Pu

rcha

se o

f N

ew lo

oms

and

acce

ssor

ies,

set

ting

up

of d

yein

g un

its, C

omm

on

Faci

lity

Cen

tres

, ope

ning

of

show

room

s, c

ondu

ctin

g ex

hibi

tions

/ fa

irs, p

ublic

ity,

prov

idin

g of

des

ign

inpu

ts

etc.

Inte

rest

sub

sidy

for

Text

ile P

ark

•Incaseofhandlooms,textile

park

s an

d cl

uste

rs s

hall

be

prov

ided

with

tes

ting

faci

litie

s on

nee

d ba

sis.

•theGovernm

entshallfacilitate

sett

ing

up o

f th

ree

pow

erlo

om

park

s in

publ

ic-p

rivat

e pa

rtne

rshi

p w

ith c

ompr

ehen

sive

com

mon

su

ppor

t in

fras

truc

ture

, inc

ludi

ng

com

mon

faci

litie

sfo

r fa

bric

dye

ing,

pro

cess

ing

and

finis

hing

.•Governm

entwillsetup20

inte

grat

ed t

extil

e/ a

ppar

el/

hosi

ery

park

s in

publ

ic p

rivat

e pa

rtne

rshi

p at

su

itabl

e lo

catio

ns in

the

Sta

te,

faci

litat

e, e

stab

lishm

ent

of

wor

ld -c

lass

com

mon

infr

astr

uctu

re t

here

in.

•Governm

entaimedatsetting

up t

hree

jute

par

ks in

the

Sta

te

durin

g th

e ne

xt f

ive

year

s. T

he

park

s to

be

set

up in

pub

lic

-priv

ate

part

ners

hip

mod

e an

d pr

ovid

e w

orld

-cla

ss p

hysi

cal

infr

astr

uctu

re


Sta

te/

Mea

sure

Gu

jara

tK

arn

atak

aTa

mil

Nad

uM

ahar

ash

tra

Wes

t B

enga

l

Ski

ll D

evel

op

men

t/Tr

ain

ing

Set

ting

up o

f Tra

inin

g In

stitu

tion

(i) U

nder

the

sch

eme,

any

aut

onom

ous

inst

itutio

ns p

rom

oted

by

gove

rnm

ent/

pub

lic

sect

or u

nder

taki

ngs

or p

rivat

e se

ctor

with

a

back

grou

nd o

f te

xtile

and

app

arel

indu

strie

s or

ski

lled

man

pow

er d

evel

opm

ent,

will

be

prov

ided

ass

ista

nce

upto

85%

, with

cei

ling

of m

axim

um o

f R

s 3

cror

e, o

f th

e pr

ojec

t co

st c

over

ing

fixed

cap

ital i

nves

tmen

t in

bu

ildin

g, e

quip

men

ts a

nd m

achi

nery

(inc

ludi

ng

inst

alla

tion

cost

), el

ectr

ifica

tion,

fur

nitu

re a

nd

othe

r m

isce

llane

ous

inve

stm

ent

requ

ired

for

sett

ing

up t

rain

ing

faci

litie

s, e

xclu

ding

land

co

st. M

axim

um 2

5% c

ost

of M

achi

nerie

s an

d Tr

aini

ng E

quip

men

ts w

ill b

e el

igib

le t

o co

nsid

er

for

Infr

astr

uctu

re in

clud

ing

Bui

ldin

g.

(ii) T

he r

ecur

ring

expe

nditu

re fo

r ru

nnin

g th

e tr

aini

ng in

stitu

tion

has

to b

e bo

rne

by t

he

prom

oter

inst

itutio

n.

In G

ujar

at, t

here

are

larg

e nu

mbe

rs o

f Tra

inin

g C

ente

rs in

the

form

of

tailo

ring

scho

ols,

whi

ch

prov

ide

trai

ning

in s

ewin

g an

d ot

her

tailo

ring

rela

ted

activ

ities

. Suc

h tr

aini

ng c

ente

rs, w

hich

co

me

forw

ard

to u

pgra

de t

heir

faci

litie

s in

or

der

to m

ake

them

via

ble

appa

rel t

rain

ing

cent

ers

will

be

prov

ided

ass

ista

nce

at 5

0%,

subj

ect

to a

lim

it of

Rs.

20

lacs

per

cen

ter,

of t

heir

inve

stm

ent

tow

ards

pur

chas

e of

eq

uipm

ent a

nd m

achi

nery

(inc

ludi

ng in

stal

latio

n co

st),

elec

trifi

catio

n an

d ne

cess

ary

furn

iture

. E

stab

lishm

ent

of n

ew t

rain

ing

cent

ers

will

als

o be

elig

ible

for

finan

cial

ass

ista

nce

unde

r th

e sc

hem

e.

Str

eng

then

ing

o

f E

xist

ing

Tr

ain

ing

In

stit

ute

s- T

he

assi

stan

ce w

ill

be li

mite

d to

R

s.1.

00 c

rore

for

each

inst

itutio

n du

ring

the

polic

y pe

riod.

The

ass

ista

nce

will

be

limite

d to

the

item

s of

ca

pita

lex

pend

iture

co

verin

g pl

ant

& m

achi

nery

, te

stin

g la

b,C

AD

/CA

M

cent

re, t

each

ing

aids

, con

tent

de

velo

pmen

t,

etc.

that

are

dire

ctly

re

late

d to

co

nduc

ting

the

text

ile e

duca

tion

rela

ted

cour

ses.

Fina

ncia

l ass

ista

nce

unde

r C

lust

er d

evel

opm

ent

sche

me

is p

rovi

ded

for

vario

us c

ompo

nent

s, s

uch

as S

kill

Upg

rada

tion

The

Ski

ll D

evel

opm

ent

Prog

ram

me

with

the

hel

p of

the

Hig

her

and

Tech

nica

l E

duca

tion

Dep

artm

ent

to b

e im

plem

ente

d un

der

the

polic

y.

The

Sta

te u

nder

the

pol

icy

aim

ed a

t tr

aini

ng 5

0,00

0 ed

ucat

ed u

nem

ploy

ed y

outh

of

the

Sta

te in

text

ile r

elat

ed a

ctiv

ities

dur

ing

the

next

5 y

ears

in a

ctiv

e ha

ndho

ldin

g w

ith G

over

nmen

t of

Indi

a, IT

Is, T

extil

e C

olle

ges,

pr

ivat

e se

ctor

pla

yers

, un

iver

sitie

s an

d co

llege

s an

d ot

her

rela

ted

outf

its.

In t

his

rega

rd, t

he S

tate

G

over

nmen

t sh

all f

acili

tate

se

ttin

g up

of

an In

stitu

te o

f A

ppar

elM

anag

emen

t by

the

App

arel

E

xpor

t Pr

omot

ion

Cou

ncil

in o

r ar

ound

Kol

kata

.

December 2012 | 13

Sta

te/

Mea

sure

Gu

jara

tK

arn

atak

aTa

mil

Nad

uM

ahar

ash

tra

Wes

t B

enga

l

Mar

ket

Dev

elo

pm

ent

and

C

apac

ity

Bu

ildin

g

Su

pp

ort

No

such

sub

sidy

in

the

polic

yM

arke

t D

evel

op

men

t an

d

Bra

nd

ing

: The

fun

ding

sup

port

w

ill b

e pr

ovid

ed fo

r th

is in

itiat

ive

wou

ld b

e 50

% o

f th

e pr

ojec

t co

st

or R

s.50

.00

lakh

s, w

hich

ever

is

less

,

Des

ign

Dev

elop

men

t an

d Pr

oduc

t D

iver

sific

atio

n: T

he f

undi

ng

supp

ort

will

be

prov

ided

for

this

initi

ativ

e w

ould

be

50%

of

the

Proj

ect

cost

or

Rs.

25 la

khs,

w

hich

ever

is le

ss

Sta

ndar

ds a

nd C

ompl

ianc

es :

The

fund

ing

supp

ort

will

be

prov

ided

to

an

indi

vidu

al u

nit

to t

he e

xten

t of

50%

of

the

cost

or

Rs.

2.00

la

khs,

whi

chev

er is

less

Mar

ketin

g in

cent

ive

is g

rant

ed o

n th

e sa

le

of h

andl

oom

pro

duct

s to

mai

ntai

n pr

ice

com

petit

iven

ess

in t

he

mar

ket.

To p

rom

ote

mar

ketin

g of

ha

ndlo

om g

oods

, Dis

tric

t Le

vel E

xhib

ition

s, S

peci

al

Han

dloo

m E

xpo

and

Nat

iona

l Han

dloo

m E

xpo

are

bein

g co

nduc

ted

with

th

e fin

anci

al a

ssis

tanc

e of

G

over

nmen

t of

Indi

a.

No

such

sub

sidy

in

the

polic

yIn

ord

er t

o ac

hiev

e th

e se

ctor

al

visi

on o

f ha

ndlo

om, t

he

Sta

te G

over

nmen

t to

fur

ther

st

reng

then

its

effo

rts

to d

evel

op

hand

loom

clu

ster

s an

d se

t up

50

addi

tiona

l clu

ster

s by

20

12 a

nd p

rovi

de c

omm

on

infr

astr

uctu

ral,

acce

ss t

o su

perio

r pr

oces

s an

d de

sign

te

chno

logy

, log

istic

al a

nd

mar

ketin

g su

ppor

t fa

cilit

ies.

Ape

x H

andl

oom

org

aniz

atio

ns

are

elig

ible

for

10%

of

the

aver

age

sale

s tu

rnov

er o

f th

e la

st t

hree

yea

rs


G. Way Forward for Textiles Industry in West Bengal

• Given the fact that the State is already lagging behind other States in textiles and also States like

Maharashtra, Gujarat and Tamil Nadu have recently announced new policy and major incentives

for the textiles sector in their State, West Bengal government would have to come out with a

really attractive package in addition to what is already being provided by Central Government for

this sector to get investments. Since this sector is one of the largest employers after agriculture,

developing this sector in the State would be in the overall interest and balanced economic

development of the State.

• With India having free trade agreements with Bangladesh and ASEAN countries, West Bengal is

strategically located also to become a leading exporting state in certain textiles segments.

• The State government’s incentive and policies have to be more than that provided by the Centre

and also by other leading States. FICCI suggests a twenty point agenda namely ‘West Bengal’s

Textiles Policy- 2022’ for the consideration of the State government. Following measures are

suggested for strengthening and reviving textiles sector base in West Bengal:

1. Competitive cost of power and uninterrupted supply of power is critical for textiles and garment

industry. Cost of power is a crucial factor for increasing cost competitiveness of industry. It

is estimated (2011 - ICRA Report for CITI) that in a Knitwear cluster in West Bengal power

tariff for industrial consumers was around Rs 5 per Kwh (reportedly the tariffs since then

have increased to Rs 7 per unit). If one compares it with Bangladesh, the cost of power will

not be more than Rs 2 or 3 in that country. Hence, our competing countries enjoy significant

cost advantage in power tariff. In order to compensate the industry for this high cost, various

States have given subsidy on power in their textiles policy. For instance, Gujarat government’s

Textiles Policy 2012 provides power tariff subsidy @ Rs 1 per unit for cotton spinning and

weaving industries.

However, given the fact that West Bengal does not have a strong base in many segments

of textiles the State could provide subsidy of Rs 1.5 per Kwh to encourage investments in

textiles. The units which purchase electricity from the state electricity/power distribution

licensee will be eligible for this benefit.

The units which want to set up captive power plants will be given assured supply of fuel/

coal linkages for the period of seven years. The State shall also ensure gas linkages for the

December 2012 | 15

generation of captive power in the State. The State government will also ensure faster

clearances for the power plant like environment, land etc. so as to ensure timely financial

closure of the project. Any excess power in captive plant could be supplied to Grid as per the

norms fixed by State Electricity Regulatory Commission. In case fuel linkage is not provided

then captive generation could also be considered for support on case to case basis.

2. Land availability- Following steps need to be taken up for providing land to the industry:

¾ To encourage setting up of large textile units and parks, the State Government should

relax the provision which prevents industry from holding maximum 24 acres of land.

¾ Currently, the Southern part of the State is more developed than other parts. In order to

ensure balanced development, the State government would reimburse 25% of the cost

of land including acquisition charges if the industry unit is set-up in designated zones

earmarked for balanced growth or additional 10% capital subsidy than that given under

TUFS and proposed Credit Linked Capital Subsidy under this policy.

¾ To reduce the transaction cost, 50% reimbursement with respect to Stamp Duty for

execution of lease, sale deeds, lease-cum-sale deeds in case of industrial land and

plots allotted or industrial sheds taken on lease. Also, the State will provide Stamp

duty reimbursement to the extent of 50% on loan and credit deeds executed for taking

long term loans from financial institutions. This support is again for designated zones

mentioned in point above.

¾ State Government should allocate land for setting up of the textiles zone/park in the State

wherever a group of more than ten industry units wants to set-up Greenfield textile park.

3. Common Infrastructure for Greenfield Clusters- The State would pursue Cluster based

strategy for textiles and garment industry. The State Government will provide additional

support to the textiles park under Centre’s SITP scheme for external infrastructure like roads,

ports, power, water supply etc and also for common amenities like testing labs, warehousing

facility, dormitories etc. The support in this regard would be Rupees 15 crore for each cluster/

park in addition to Centre’s support. If the park is situated in designated zones for balanced

growth then the amount of support would be Rs 25 crore in addition to Centre’s support.

In particular, CITI’s study found out that West Bengal has the potential to develop a leading

knitwear cluster. The State enjoys availability of power, water and labour and the study estimates

that cost disadvantage in West Bengal vis-à-vis Tirupur is less if one compares a knitwear

cluster in Bangladesh. West Bengal was once a knitwear and hosiery centre originally and then


many companies migrated to Tamil Nadu because of labour issues and strikes. However, now

the knitwear industry in Tamil Nadu is looking for relocation because of problems related to

pollution, labour and power. This offers an opportunity to West Bengal to regain investments in

knitwear sector and place itself on the global knitwear map alongside neighbouring Bangladesh.

The State can also look at developing product or sector specific parks with huge potential.

These could be in the following areas:

¾ Garment, Knitwear, Hosiery

¾ Weaving & Processing

¾ Technical Textiles

The assistance for the same may be higher than the general assistance mentioned

above. This would be on case to case basis depending on project’s potential in terms of

employment, output, exports etc.

4. Skill Development- Efforts of private sector companies/institutions, directly or through their

non-profit arms, on skill upgradation, will be scaled-up with appropriate incentives and

infrastructural support, through a mix of viability gap funding and direct assistance by State

Government.

¾ The State Government will facilitate Viability Gap Funding from the Centre for setting up

of these ITIs/Polytechnics etc on PPP basis for covering the capital cost as per the VGF

guidelines of the Ministry of Finance. In addition, the State will also provide its share of

viability gap funding (which is another 20%) for such institutes. Since the Centre already

provides 150% weighted deduction on skill development expenses this should make skill

development attractive in the State for the industry on PPP basis. State Government will

also explore opportunities for tie-up with organizations like ATDC, ILFS for the same.

¾ Further, in order to strengthen the existing training institutes in the State which are in

existence for the last five years at least and are conducting academic programmes in

textile education offering certificates, diploma, and degrees they shall be provided

technical assistance of Rupees three crore each under the policy provided they scale-

up their capacities and upgrade courses in partnership with industry and as per industry

requirements of the day. This assistance will not be for land or building but for other capital

expenditure on machinery, tools, teaching aids, content development etc.

¾ Training Centres to encourage workers in the unorganized handloom and decentralised

powerloom or silk sector to upgrade their skills for modernized spinning, hosiery and

December 2012 | 17

garment units shall be provided support. Training Centres which come forward to upgrade

their facilities for this purpose would be provided financial assistance of Rupees 30 lakhs

per centre along with partial reimbursement of stipend by the State government.

¾ State Government can also launch industry specific (e.g. garment, hosiery, jute etc.) skill

development program involving third party for both training new workers and improving

skill level of existing workers. Payment to third parties may be restricted with a upper

cap of Rs. 12000 per trainee. Govt. of West Bengal may contribute 25% of the fund

requirement and balance 75% may be taken from existing central Govt. schemes.

The above support measures will be 100% for designated zones and could be 50% in other

zones of the State.

5. As mentioned earlier, the State is a net importer of many raw materials and intermediate

products for textiles value chain. In order to ensure price competitive supply of such products

to the State, the State government should provide the following:

¾ Exemption from entry tax on plant and machinery and capital goods including equipments

for captive power generation and for waste disposal facilities.

¾ Exemption from Entry Tax on procurement of fibres and yarns in the State for sale of

fabrics in India and abroad. This will help the industry to create weaving capacities in the

State and thereby increasing employment also.

¾ CST refund to units on purchase of intermediate or raw material product in textiles value

chain upto garment stage. This concession will be available for five years from the date of

commencement of operations or till the time GST is implemented. If GST is implemented

in between then an alternate scheme will be introduced in consultation with stakeholders.

6. Scheme for Energy Conservation, Water Conservation and Environmental Compliance to

existing units (more than 2 years old)-

¾ Annual assistance up to 50%, Max Rs. 75,000 for Energy Audit/Water Audit Environmental

Compliance which will be applicable in each case separately.

¾ Annual assistance up to 20% of cost of equipments, Max Rs. 20 lakhs which will be

applicable in each case separately.


7. Common Effluent Treatment Plant- The State government will provide 50% of the project cost

or Rs 5 crore whichever is less for setting up a CETP in new or existing textile parks/clusters.

The operating cost of running the CETP to be borne by units.

8. Funding support for Standards and compliance: In order to ensure that textiles industry in the

State meets minimum expectations of global buyers, the funding support shall be provided to

an individual unit to the extent of 50% of the cost or Rs 2 lakhs whichever is less for obtaining

certification/accreditation under recognized and globally accepted international standards like

ISO-9000, ISO-140000, 1SO-18000, Social Accountability Standards, OEKO-TEX etc.

9. Credit Linked Capital Subsidy- This support would be in addition to the support given for

technology upgradation scheme of the Centre. The State government shall give the following

in addition to TUFS for modernization, establishment of new units and expansion of existing

units (if expansion is more than 25%):

¾ 5% capital subsidy or maximum of Rupees 1 crores whichever is less and

¾ 6% interest subsidy

The support under this scheme need not be tied to utilization of TUFS scheme by the unit.

10. Support for Market Development, Branding and Design- This would be meant for a group

marketing scheme for handlooms. Reimbursement of 25% of project cost or Rs 25 lakhs

whichever is less annually.

11. The State government will also come out with a separate package for handloom sector which

would include the following:

¾ Working capital loan at very low rates

¾ Ensuring raw material availability at cheaper rates for handloom

¾ Free power supply up to specified monthly limits for handloom

¾ Scheme for housing, health insurance and other welfare schemes in the State with the

help of the concerned State Departments and dovetailing these with the schemes being

implemented by Centre

12. The State government shall ensure faster clearances for textile units in textile parks and

designated clusters in terms of excise, custom, environment, Factories Act etc. and a single

window mechanism for granting permissions for textiles sector.

December 2012 | 19

13. Assurance from the State Government for an effective institutional mechanism for labour

relations to guard against any disruption in the production in textile parks and clusters.

14. In addition, there is a need to revisit various labour laws at State level for designated clusters/

parks which hamper the growth of this sector. These changes could be considered at cluster/

textile park level to begin with. Some of these changes may not require amendments also as

can be seen in the table below.

Section (Factories Act 1948)/ Subject

Existing Provision

Limit in the Act (Power to exempt is subject to these limits in the Act)

Suggested Amendment

Remarks

Section 54; Daily Hours 9 hours 12 hours (as per

Section 65(3i) 10 hours Change within existing limit

Section 65(3iii); Weekly hours 48 hours 60 hours (as per

Section 65(3iii)) 70 hours Amendment seeks increase in existing

limits

Spread over; Section 56

Ten & half hour in any day (inclusive of rest

intervals)

13 hours (as per Section 65(3ii)) Eleven and a half hour Change within

existing limit

Section 65; Overtime in a quarter 50 hours 75 hours (as per

Section 65(3iv))

150 or 156 hours (13 weeks in a quarter multiplied by 2 hours overtime each day)

Amendment seeks increase in existing

limits

15. Establishment of Centre of Excellence for Product and Design Development: Product

differentiation is the key for the success of the businesses in today’s competitive market.

This center will support individual entrepreneurs and MSMEs in this direction. This center

will have training and sample production facility for textile (including handloom) products. The

infrastructure will include Design center, Pilot production center, training facilities, testing

facilities, conference room & office building. Industry will be able to take trial runs in controlled

environment on payment basis under the able guidance of the faculties / technicians. This

will not only help them to come out with new products / designs but will reduce the cost of

developing new products. The center might be developed in PPP mode. Fund allocation might

be Rs. 25 cr or 80% of the project cost whichever is less.

16. To promote Jute and Silk, support shall be given for Common Facility Centres on PPP mode.


17. The State Government shall also try to set-up R&D Centre for textiles in collaboration with the

industry and international institute to encourage state of the art research in textiles.

18. The State will also consider providing freight subsidy to units located in far away designated

backward regions for supplies meant for exports.

19. The State government shall also strengthen its textiles department to look into the

implementation of this policy and other issues.

20. The State would also organize with FICCI and other industry bodies road shows in India and

abroad to attract investments in textiles sector.

FICCI’s Suggestions on West Bengal’s Textiles Policy ...ficci.in/SEdocument/20216/ficci-policy-for-west-bengal-textile.pdf · 4 | FICCI’s Suggestions for West Bengal’s Textiles

Documents