New Delhi, Friday, January 11, 2019: Mr. Sanjay Jain, Chairman, CITI welcomed the new Scheme launched by Gujarat Government for Assistance to Strengthen Specific Sectors in the Textile Value Chain. He thanked the Government of Gujarat for being prudent and excluding Ginning and Spinning Sectors as there is overcapacity and focusing on value added segments where the Country is weak i.e. Weaving, Knitting, Processing and Technical Textiles.
Chairman, CITI highlighted the fact that under the last policy by the Government of Gujarat, there has been a lot of investments in the spinning sector. However, the spinning capacity in India is already in excess with 30% exportable surplus and there is no requirement of any further investment incentives for this particular sector. He further stated that due to excess capacity in spinning segment and removal of all export incentives, the sector is facing tremendous margin pressure and a lot of NPAs are happening under spinning segment.
With the host of incentives by the Government of Gujarat in the form of interest subsidy, power tariff subsidy, the new scheme will also provide assistance in a variety of areas such as technology upgradation, environmental compliance cost and for the textile parks. This is a welcome step for Weaving, Knitting, Dyeing/Printing, Machine Carpeting, Technical Textiles, Made-ups, Composite Units and other activities in the textile value chain. It will ensure balanced growth for the Indian Textile Industry and would further ensure that subsidies are given to the needed sector only.
Chairman, CITI appealed to other State Governments to take cue from the Centre and Government of Gujarat and ensure that it may not subsidise sectors where the Country is already surplus on capacity. He also stated that there is a need to have a country focused approach as against the State level policies which is leading to tax-payers hard earned money being used where it is not required at all and less money is getting allocated to the deficit sectors. Hence, States need to be prudent in incentivising investments by focusing on thrust areas where the States have dearth of policy support.