Cabinet approves plan to set up 7 Mega Textile Parks

The cabinet said that while the seven textile parks will boost manufacturing and export of textiles, the productivity linked bonus is expected to improve the performance of Indian Railways.

For setting up of mega textile parks, the central government and allied states will engage with developers who will bring in other investors to set up production units.

Developers will get long term lease of the park along with real estate development rights but it will be their responsibility to bring investors to set up the unit. The lease will be initially for 25 years, which can be extended for a further 25 years. The master developer will develop the park and maintain it during the concession period.

While the developer will receive infrastructure development assistance, investors setting up production facilities will earn a “competition incentive” on a first-come-first-served basis, Textiles Secretary Upendra Prasad Singh said in an interview after the cabinet announced the decision.

Singh said that under the ‘Pradhan Mantri Mega Integrated Textile Region and Apparel’ (PM Mitra) scheme, Special Purpose Vehicles (SPVs) would be set up with 49% central government share and 51% share of the respective states.

The central government claimed that each of these seven parks is expected to generate around 100,000 direct and 200,000 indirect jobs. For greenfield projects, 30% of the infrastructure cost will be available as viability gap financing, subject to a ceiling of ₹500 crores, while brownfield projects will be supported by 30% of the ‘balance cost’, up to a maximum of Rs. ₹200 crores.

“In addition to growth capital support, we will also provide ₹300 crores per park, which is called competitiveness promotion support. It will not go to the developer but to the units that will come into the park, to make them competitive. We will provide up to this amount as an incentive of up to 3% of their turnover on a first-come-first-served basis ₹300 crore per park is exhausted. The first requirement for a park is that it should have a minimum of 1,000 acres. We have heard from ten states that they have contiguous debt-free land available and are interested in creating these parks,” Singh said.

These states are Tamil Nadu, Punjab, Odisha, Andhra Pradesh, Gujarat, Rajasthan, Assam, Karnataka, Madhya Pradesh and Telangana. For new units in the park that need support to increase production and establish viability, competitiveness incentives are important, the Union Cabinet said.

The cabinet’s decision to approve Productivity Linked Bonus (PLB) to Indian Railways employees comes ahead of Dussehra holidays.

Union Information and Broadcasting Minister Anurag Thakur said, “The productivity linked bonus is expected to motivate the employees to work towards improving the performance of Railways.”

The pay calculation limit prescribed for payment of PLB to eligible non-gazetted railway employees is ₹7000/- per month per eligible railway employee, the maximum amount payable is ₹17,951 for 78 days,” the Union Cabinet said in a separate statement.

This year financial expenditure will be ₹1,985 crore. Last year, the financial expenditure was estimated at ₹2,081.68 crore.

Girish.p@livemint.com