Lok Sabha Question No. 1181 (UNSTARRED), answered on 2017-02-09
Subject: Package for Textile Sector
Ministry: TEXTILES
Asked by: JAYADEV GALLA

## PACKAGE FOR TEXTILE SECTOR

## 1181.   SHRI JAYADEV GALLA:

Will the Minister of TEXTILES वस्त्र मंरी be pleased to state:

(a) whether the Union Government has cleared Rs. 6000 crore package to textile sector;

(b) if  so,  the  details  of  the  package  and  the  extent  to  which  the  handloom  weavers  are likely to be benefited with particular reference to Andhra Pradesh and Telangana;

(c) the  details  of  the  employment  opportunities  likely  to  be  generated  by  the  above package, State-wise;

(d) whether some apparel manufacturing units have shifted to other countries such as China and if so, the details thereof and the reasons therefor; and

(e) the steps taken by the Government to counter the same?

## उत्तर

## ANSWER

## वस्त्र मंरी (

## MINISTER OF TEXTILES (SMT. SMRITI ZUBIN IRANI)

(a) & (b): Yes Madam. The details of package are given in Annexure I. The package was intended to boost employment generation, investment and to enhance textile exports in apparel sector. Apart from the package, Rs.612 crore has been allocated in the Financial Year 2016-17 to  implement  following  schemes  in  the  country  including  the  states  of  Andhra  Pradesh  and Telangana for development and promotion of handloom sector:-

- (i) Yarn supply scheme/Mill Gate Price Scheme
- (ii) National Handloom  Development Programme
- (iii) Trade Facilitation Centre and Craft Museum
- (iv) Handloom weavers Comprehensive Welfare Scheme
- (v) Comprehensive Handloom Cluster Development Scheme

(c): In  textiles,  every  one  crore  rupees  of  investment  generates  an  average  of  30  jobs whereas  in  the  apparel  and  made-ups  segments,  a  minimum  of  70  jobs  are  generated.    The likely employment that may be generated through implementation of the package is estimated to  be  about  1  crore  over  the  next  3  years.  However,  this  is  contingent  on  other  factors  i.e. overall  economic  growth, demand situations  and competitiveness of the industry. State-wise estimates cannot be quantified.

(d): Some of the major apparel manufacturers have invested abroad; however, no report has been  received  from  the  industry  indicating  that  apparel  manufacturing  units  have  shifted  to other countries including China.

- (e): Does not arise.

## )

The Government has announced a special package of Rs 6,000 crores for apparel sector in June 2016 and for made-up sector in December 2016 for boosting the employment generation and export potential of Apparel and made-up Sector. Salient features of the package are:-

## 1. Labour Law Reforms

- a) Government to bear 3.67% of employer's Employee Provident Fund (EPF) contribution for new workmen  in addition to existing reimbursement of 8.33% employer contribution under Pradhan Mantri Rojgar Protsahan Yojana (PMRPY) for 3 years for apparel and made-ups sectors.
- b) Pradhan Mantri Paridhan Rojgar Protsahan Yojana (PMPRPY) guidelines formulated and circulated on 12.8.2016 for apparel. Office of Textile Commissioner has opened a web portal inviting applications for apparel units who are willing to avail this benefit. An amount of Rs. 30 crores for FY 2016-17 has been allotted to Ministry of Labour and Employment which has started disbursement for PMPRPY for apparel.
- c) EPF is to be made optional for employees in apparel and made-ups sectors earning less than Rs. 15,000 per month.
- d) Overtime cap is to be raised from 50 hours per quarter to 100 hours per quarter leading to increased earnings of workers for apparel and made-ups sectors.
- e) Considering  the  seasonal  nature  of  the  industry,  fixed  term  employment  has  been introduced for the apparel sector and notified on 7.10.2016. A fixed term workman will be  considered  at  par  with  permanent  workman  in  terms  of  working  hours,  wages, allowances and other statutory dues.

## 2. Additional incentives under ATUFS

-  Scheme  for  Production  and  Employment  Linked  Support  for  Garmenting  Units (SPELSGU) under ATUFS was rolled out on 25.7.2016 for apparel sector and has now been extended to made-ups sector on 10.1.2017.
-  The subsidy provided to apparel and made-ups units, under Amended-TUFS, is being increased from 15% to 25%, providing a boost to employment generation. The cap has also been raised to Rs. 50 crores.
-  Apart from promoting the sector, subsidy is output based and will be disbursed only after the expected jobs are created after a period of 3 years.

## 3. Rebate of State Levies

-  In a first-of-its-kind  move,  a  new  scheme  called  Scheme  for  Rebate  of  State Levies(RoSL) on export of garments has been introduced and notified on 12.8.2016 to refund the state levies which were not refunded so far.
-  Drawback at All Industries Rate will be given for domestic duty paid inputs even when fabrics are imported under Advance Authorization Scheme for garments.
-  Special  Advance  Authorisation  Scheme  for  garments  has  been  notified  on  11.8.2016 for combining Advance Authorisation Scheme with All Industries Rates of drawback.
-  The scheme has been approved to be extended to made-ups also.

## 4. Enhancing scope of Section 80JJAA of Income Tax Act for garment industry

-  Looking at the seasonal nature of  garment industry, the  provision of 240 days under Section 80JJAA of Income Tax Act has been relaxed to 150 days for garment industry vide notification dated 8.9.2016.  This provision will take effect from 1.4.2017.

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