Lok Sabha Question No. 4157 (UNSTARRED), answered on 2016-08-11
Subject: Package for Textile Sector
Ministry: TEXTILES
Asked by: ADVOCATE NARENDRA KESHAV SAWAIKAR, POONAMBEN HEMATBHAI MAADAM

- (a) Yes Madam.
- (b) The details of package are given in Annexure I.  The Government has fixed export target of USD 48.5 billion for textile and apparel for current financial year.
- (c) Home textiles have not been given the benefits of the said package. Reasons for the same are given in Annexure II.
- (d) Employers/ manufacturers will get benefit from the special package as it will boost the  competitiveness  of  the  apparel  sector  and  promote  economies  of  scale  in  the Textile and apparel sector. More and more apparel units will become compliant with respect  to  statutory  dues  and  more  jobs  will  be  generated  in  formal  sector.  The expected impact of the special package on employees are:
1. More cash in the hands of employees with optional EPF for employees earning less than Rs. 15,000
2. Opportunity for workers to earn more by increasing the overtime limit from 50 hours to 100 hours
3. A fixed term workman will be considered at par with permanent workman in terms  of  working  hours,  wages,  allowances  and  other  statutory  dues  by  the introduction to fixed term employment
- (e) The  special  package  will  promote  investment  and  employment  generation  in  the textile and apparel sector across all states in the country.

## LOK SABHA UNSTARRED QUESTION NO. 4157 TO BE ANSWERED ON 11.8.2016

## PACKAGE FOR TEXTILE SECTOR

## 4157.   ADV. NARENDRA KESHAV SAWAIKAR: SHRIMATI POONAMBEN MAADAM:

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

- (a) whether the Government has recently approved Rs.6000 crore package for the apparel and textiles sector;
- (b) if so, the details thereof and the targets fixed by the Government to increase the export during the current financial year;
- (c) whether home-made textiles have also been benefited by the package and if so, the details thereof and if not, the reasons therefor,
- (d) the  manner  in  which  the  said  package  is  likely  to  benefit  both  employers  and employees in the textile sector; and
- (e) the State-wise details of the employment opportunities likely to be generated by the said package?

## उत्तर

## ANSWER

## वस्त्र मंरी ( श्री अज )

## MINISTER OF STATE FOR TEXTILES (SHRI AJAY TAMTA)

The Government has announced a special package of Rs 6,000 crores for boosting the employment  generation  and  export  potential  of  the  Textile  and  Apparel  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.
- b) EPF will be made optional for  employees  earning less  than  Rs.  15,000  per  month; thus, leaving more money in the hands of the workers.
- c) Overtime  cap  will  be  raised  from  50  hours  per  quarter  to  100  hours  per  quarter leading to increased earnings of workers.
- d) Considering  the  seasonal  nature  of  the  industry,  fixed  term  employment  will  be introduced for the garment sector. 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

-  The subsidy provided to garmenting units, under Amended-TUFS, is being increased from 15% to 25%, providing a boost to employment generation.
-  The  package  breaks  new  ground  in  moving  from  input-based  to  outcome-based incentives;  a  unique  feature  of  the  scheme  will  be  to  disburse  subsidy  only  after expected jobs have been created.

## 3. Enhanced duty drawback coverage

-  In a first-of-its-kind move, a new scheme will be introduced to refund the state levies which were not refunded so far.
-  This move will greatly boost the competitiveness of Indian exports in foreign markets
-  Drawback  at  All  Industries  Rate  will  be  given  for  domestic  duty  paid  inputs  even when fabrics are imported under Advance Authorization Scheme.

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

-  Looking at the seasonal nature of garment industry, the provision of 240 days under Section  80JJAA  of  Income  Tax  Act  would  be  relaxed  to  150  days  for  garment industry.

Annexure II

## Reasons for not including home textiles in the special package

-  Apparel sector is the engine for growth of textile and apparel value chain having highest employment generation potential.
-  Global apparel demand (US$ 1,685 bn.) is 15 times higher than home textile demand (US$ 109 bn.).
-  Global  apparel  exports  (US$  469  bn.)  is  approx.  7  times  higher  than  home  textile exports (US$ 65 bn.)

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