Lok Sabha Question No. 2280 (UNSTARRED), answered on 2020-09-23
Subject: Subsidies for Cotton
Ministry: TEXTILES
Asked by: S. Jothimani

## LOK SABHA UNSTARRED QUESTION NO. 2280 TO BE ANSWERED ON 23.09.2020

## SUBSIDIES FOR COTTON

## 2280.    MS. S. JOTHIMANI:

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

(a) whether the Government is planning to increase subsidies for cotton on par with rice or wheat, if so, the details thereof and if not, the reasons therefor;

(b) whether the Government has formulated any proposal to mitigate the loss of jobs and reduction in market growth of cotton textile industry in the country, particularly in Tamil Nadu;

(c) if so, the details thereof, State/UT-wise; and

(d) whether the Government is planning to enhance the sales from the industry by introducing more FTAs or reducing import duties in order to make the prices more competitive and if so, the details thereof?

## उत्तर

## ANSWER

## वस्त्र मंत्री ( श्रीमती स्मृतत ज़ूबिन इरानी )

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

(a): Every year before commencement of the Cotton Season (October to September), Ministry of Agriculture, Government of India fixes the Minimum Support Price (MSP) of two varieties of seed cotton (kapas) to protect the interest of cotton farmers. While recommending MSPs, Commission on Agricultural Costs & Prices (CACP) considers important factors like cost of production, overall demand-supply conditions, domestic and international prices, inter-crop price, terms of trade between agricultural and non-agricultural sectors, the likely effect on the rest of the economy, besides ensuring rational utilization of land, water and other production resources and a minimum of 50 percent as the margin over cost of production in case of MSPs.  Government has recently  increased  the  MSPs  for  all  mandated  Kharif,  Rabi  and  Commercial  crops  for  2020-21 season  in  line  with  the  principle  of  providing  atleast  50  percent  return  over  all  India  weighted average cost of production. For cotton season 2020-21, Government has increased the Minimum Support  Price  (MSP)  of  Medium  Staple  Cotton  from  Rs.  5255/-  to  Rs.  5515/-  and  Long  Staple Cotton from Rs. 5550/- to Rs. 5825/- per quintal.

(b) & (c): Government  has  taken  number  of  measures/incentives  to  boost  textile  sector  and generate  employment  in  the  country  as  a  whole  including  Tamilnadu.  Measures  taken  inter-alia include the following:-

(i) Government  has  launched  a  special  package  of  Rs.6000  crore  in  2016  to  boost investment, employment generation of around 1.11 crore jobs and exports in the garmenting and made-ups sector with the components viz., (i) full refund is provided under Remission of  State  Levies  (ROSL)  to  the  exporters  for  the  State  level  taxes;  production  linked additional incentive of 10% is provided under the Amended Technology Up-gradation Fund Scheme (ATUFS).

(ii) Amended Technology Upgradation Fund Scheme is being implemented to upgrade technology/machineries of textile industry with an outlay of Rs.17,822 crore during 20162022  which  will  attract  investment  of  Rs.1  lakh  crore  and  it  is  estimated  to  generate employment for about 35 lakh persons in the textile sector. Scheme for Production and Employment Linked Support for Garmenting Units (SPELSGU): Ministry has also notified the Scheme for Production and Employment Linked Support  for  Garmenting  Units  (SPELSGU)  under  ATUFS  to  incentivize  production  and employment generation in the textile sector.

(iii) Scheme  for  Integrated  Textile  Park  (SITP):  Under  the  Scheme,  Government provides 40% subsidy with a ceiling of Rs.40 crore to set up Textile Parks for infrastructure creation and employment generation.

(iv) A  separate  scheme  for  development  of  Knitting  and  knitwear  has  been  launched recently to boost production in knitting and knitwear clusters which provide employment to nearly 24 lakh persons.

(v) Jute ICARE for increasing the income of farmers by at least 50% various incentive are given through promotion of certified seeds, better agronomic practices, use of microbial re-using of Jute plant, retting to produce quality of jute, increase productivity and to reduce the  cost  of  jute  production  for  the  jute  farmers.  For  modernization  of  Jute  Industry  an incentive of 20% of the cost of the new machinery for Jute Mill and 30% JDB-MSME unit is  considered for reimbursement under the scheme, subject to maximum of Rs. 2.25 crore per unit. The new jute entrepreneurs are being engaged on job work basis in existing jute mills/MSME  units  for  boost  production  of  jute  diversified  products  and  start  their  own manufacturing units on self-employment basis and become self-sustenance.

(vi) Power Tex India: A comprehensive scheme for Powerloom sector was launched in April, 2017 with an outlay of Rs. 487 crores for three years. This scheme has components relating  to  Powerloom  upgradation;  infrastructure  creation,  concessional  access  to  credit, etc. The scheme has been designed to attract investment of Rs. 1000 crores and employment to 10000 persons in the Powerloom sector.

(vii) SAMARTH:- The Scheme for Capacity Building in Textile Sector (SCBTS): A new scheme with an outlay of Rs 1300 crores has been approved recently in December, 2017 for providing employment oriented training to 10 lakh people in various segments in textiles including one lakh in traditional sectors.

(viii) SILK SAMAGRA:Under this scheme, Government of India has been implementing a Central Sector Scheme 'Silk Samagra' for development of sericulture in the  country  with  components  such  as  Research  &  Development,  Training,  Transfer  of Technology  and  I.T  Initiatives,  support  to  seed  organizations,  coordination  and  market development  and,  quality  certification  Systems  (QCS)/  Export  Brand  Promotion  and Technology Upgradation. R&D efforts have also been initiated to evolve new products. It is estimated that employment is likely to be generated around 11 million persons by 2022.

(d): In  order  to  boost  exports  in  textile  sector,  Government  has  introduced  the  new  RoSCTL (Rebate of State and Central Taxes and Levies) scheme w.e.f 7 th March 2019. Government has also notified a special one-time additional ad-hoc incentive of upto 1% of FoB value to be provided for exports  of  apparel  and  made-ups  to  offset  the  difference  between  RoSCTL  and  RoSL  + MEIS@4%,  from  7.3.2019  to  31.12.2019.  To  boost  exports  in  MMF  sector,  Government  has removed anti-dumping duty on PTA, a key raw material for the manufacture of MMF fibre and yarn. Exporters are also provided assistance under Market Access Initiative (MAI) Scheme. Interest equalization rate for pre and post shipment credit for exports by MSMEs of textile sector has been enhanced  from  3%  to  5%  w.e.f.  02.11.2018.  Benefits  of  Interest  Equalization  Scheme  has  been extended to merchant exporters from 02.01.2019 which was earlier limited to only manufacturer exporters.

****