As part of efforts to attract Rs 10,000 crore investment for the sector and turn Uttar Pradesh into a global textiles hub, the government announced Monday that it would give a 25 per cent subsidy on purchase of land and up to 100 per cent exemption on stamp duty for setting up textile units in the state as part of its new policy.
“Making the state as the global textile hub, attracting Rs 10,000 crore investment and generating 5 lakh jobs are the main focus of this new policy,” said Uttar Pradesh Handloom and Textile Industry Minister Rakesh Sachan said. He said the government on Monday issued an official order for the new Textile and Garments Policy-2022.
The new policy will offer a 25 per cent subsidy on the purchase of land from industrial development authorities or other development authorities in the state for setting up textile units. The rule would be applicable in all districts except Gautam Budha Nagar, where the subsidy would be 15 per cent. At the same time, the subsidy would be limited to the 10 per cent of the total cost of the project. The subsidy would be given only when the textile unit would start production within five years of purchase of land.
Talking about the new policy, Sachan said 1000-acre textile parks would be developed in Lucknow and Hardoi districts under the PM Mitra Park scheme and the land for the project has been identified.
“Except Gautam Budh Nagar, textile and garment units set up in all districts would get 100 per cent exemption from stamp duty. In Gautam Budh Nagar, textile units would receive 75 per cent exemption. Meanwhile, textile parks being established under the PM Mitra Park schemes would get 100 per cent exemption from stamp duty but private developers would get 50 per cent exemption on stamp duty,” he added.
As a special incentive for the developers of textile parks under the PM Mitra scheme, an subsidy of Rs 2 per kv in the electricity tariff would be provided to them for five years, subject to a maximum of Rs 60 lakh per year per textile park. The power subsidy would be given on the condition that the textile park provide employment to a minimum of 50 people.
In order to encourage silk production in the state, the policy also offers 100 per cent stamp duty exemption on setting up silk production and threading units. The policy also offers a capital subsidy, which includes a 25 per cent subsidy for purchase of plant and machinery for textile and garment units. Units being set up in Bundelkhand and Purvanchal region would be able to avail an additional 10 per cent capital subsidy, although the subsidy amount has a maximum cap of Rs 100 crore per unit.
The policy also offers financial assistance to investors in development of infrastructure for their units. For units being developed on undeveloped land, the government would provide 50 per cent reimbursement on the cost of development of water pipelines, electricity lines, affluent plants, roads etc upto maximum of Rs 3 crore per unit.
The policy offers 25 per cent reimbursement on the cost of establishing research and development facilities up to a maximum of Rs 2.5 crore and another 25 per cent on construction of quarters and hostels for workers and staff up to a maximum of Rs 5 crore.
Further, the policy offers a 60 per cent subsidy on the interest from loans taken for plant and machinery, which would be reimbursed for a period of seven years. The upper limit for such reimbursement would be Rs 1.5 crore for units established in the rest of the state, while Rs 75 lakh per year in Gautam Budh Nagar.
Then new textile and garment units would also be given 100 per cent exemption on electricity duty for the period of 10 years.
In order to achieve the employment targets, the government would offer Rs 3,200 per month to each labourer employed by Mega and Super Mega Garment units for a period of five years in all districts, except Gautam Budh Nagar and Ghaziabad. As part of its efforts to promote exports, the new units exporting their garments would be provided a subsidy of 75per cent for first two years of operation, 50 per cent over the next two years and 25 per cent in fifth year for transportation of their products from the units to the port.