KTR Seeks Centre's Aid To Develop Handlooms And Textiles In Telangana

Minister KTR sought funds from Centre for development of Handlooms & Textiles in Telangana

In a letter to Union Minister for Women Child Development and Textiles Smriti Zubin Irani, Minister KTR sought funds from the Union Budget 2021-22 for the development of Kakatiya Mega Textile Park, and sanction of Mega Powerloom Cluster at Sircilla and sanction of certain proposals for the development of Handlooms & Textiles in the Telangana State.

Minister KTR in the letter stated that the Kakatiya Mega Textile Park (KMTP) at Warangal would take off in FY 2021-22. “KMTP is being developed at a total estimated project cost of ₹ 1552 Cr of which the core infrastructure works would cost approximately ₹ 1094 Cr. We have aligned our project activities such that major external and internal infrastructure works at KMTP can be taken up immediately upon receipt of the proposed financial support under the Mega Textile Park scheme,” said KTR.  

“Under the proposed scheme, we understand that a total of Rs 500 Cr capital support is available for a Mega Textile Park. We request that approximately Rs 300 Cr of this amount be released at the earliest to kick start major external infrastructure works urgently needed at the park,” said Minister KTR.

Minister KTR also mentioned the revised guidelines of the Comprehensive Powerloom Cluster Development Scheme (CPCDS) to be implemented beyond the 12th Five Year Plan i.e., 2017-18 to 2019-20 with an objective to develop the clusters that have a concentration of about (5,000) decentralized power looms or more by providing assistance to various segments such as infrastructure common facilities, other need-based innovations, technology Up-gradation, and Skill Development.

The Government of Telangana has conducted Geo-tagging of Powerlooms in Telangana State, as per the geo-tagging report (35,588) power looms are existing in Telangana, out of which the majority of power looms i.e., (25,495) are alone existing in Sircilla District.

“Taking into account of existing power looms into cognizance, the Sircilla District stands best suitable to establish Mega Powerloom Cluster under CPCDS and submission of a proposal to Govt. of India for sanction and developing Mega Powerloom Cluster therein, such as Ichalkaranji (Maharashtra, Surat (Gujarat) Karanpura & Solar, etc., which were already sanctioned as Mega Powerloom Clusters during 12th Five Year Plan during 2017-18 to 2019-20,” said KTR.

Keeping in view the plan outlay of Rs.99.99 Crores (Rs.75 Crore for Powrloom Mega Cluster and Rs.24.99 for Silk Mega Cluster) provided for beyond 12th Plan i.e., 2017-18 to 2019-20, the CPCDS assistance of Government of India for each approved Powerloom / Silk Mega Cluster project would be limited to Rs.50 Crore inclusive of administrative expenditure, M&E and professional fee beyond the 12th Five Year Plan i.e., 2017-18 to 2019-20. Also overflow, if any, to go to the next plan.

It is submitted that as per the guidelines contemplated by the Govt. of India an amount of Rs.50.00 crores should be the project cost and the Funding pattern shall be 60:40 (Government of India – 60: SPV-40). In this context, it is pertinent to state that the Government of Telangana with a unique intention to generate employment for unemployed masses is setting up Weaving Park under Worker to Entrepreneur Scheme and Apparel Park at Sircilla. Further, in order to make Textile Park, Sircilla more viable it is planned to restart the CFC at the existing Textile Park, Sircilla.

It is further submitted that since the funding from Govt. of India under the scheme is Rs.50.00 Crores and implementation in Sircilla Powerloom Cluster shall take huge time. As such the Government of Telangana have been setting up Weaving Park under Worker to Entrepreneur Scheme, Apparel park at Sircilla, and CFC at Textile Park, Sircilla and it is opined to fill up critical gaps in setting up Weaving Park under Worker to Entrepreneur Scheme, Apparel park at Sircilla and CFC at Textile Park, Sircilla duly dovetailing the Govt. of India funds under CPCDS Scheme.

“In view of the circumstances explained above, I request the Union Minister for Textiles, Govt. of India to kindly sanction Mega Powerloom Cluster at Sircilla Telangana State and sanction an amount of ₹ 49.84 Crores from out of the projected outlay of ₹ 993.65 Crores towards filling various gaps and to implement the components including Infrastructure gaps, Modernization, and Expansion of Production base, strengthen of Value Chain, market Development, skill Development & Capacity Building and administration studies & Project Monitoring costs of Textile Park, Weaving & Apparel Park at Sircilla, Telangana State,” said KTR.

It is also pertinent to state that the Government is very keen to set up Powerloom Development Corporation to look after various marketing strategies under the Powerloom Sector. It would be justifiable that the Powerloom Development Corporation will be the implementing agency and SPV on behalf of the State Government. The Government of Telangana has been contributing a major share of ₹ 756.97 Crores in the Project.

Minister KTR mentioned that the Telangana State has a very rich heritage in handlooms, handicrafts providing employment to a large number of artisans in rural areas. There are more than 40,000 handloom workers concentrated mainly in Yadadri Bhongir, Gadwal, Warangal, Rajanna Sircilla, and Karimnagar Districts. Apart from that, there are about 49,000 power looms in the State out of which 36,000 power looms alone are in Sircilla. With the strong presence of both handloom and power loom sectors and due to its economic significance there is a need to strengthen the development of the above sectors in the State by sanctioning the proposals as detailed hereunder:

In the letter, Minister also requested for sanctioning of the Indian Institute of Handloom Technology (I.I.H.T) in Telangana State. Minister KTR said, “At present, there is no such Institute in Telangana State to offer a course in diploma in handloom Technology and the students are finding it very difficult and are going to neighboring states such as Andhra Pradesh, Orissa, Tamil Nadu, Karnataka to acquire admissions in Indian Institute of Handloom Technology (I.I.H.T). Keeping in view the potential in the Handloom Sector and the necessity of creating a skilled human resource there is a dire need to set up an Indian Institute of Handloom Technology (I.I.H.T) in Telangana State. This will attract the youth to the Handloom sector and generate employment for them, besides contributing to strengthening the Handloom industry with the latest technological and design interventions.

He further stated that sufficient land with a constructed building facility is available at Handloom Park, Pochampally, Yadadri Bhongir district for the establishment of IIHT. Therefore, it is requested to sanction one Indian Institute of Handloom Technology to the Telangana State, wholly run by the Govt. of India's financial assistance.

Minister KTR also requested for up-gradation of Powerlooms under the In-SITU Scheme and sanction of Block Level Handloom Clusters under NHDP.

Minister KTR also mentioned the impact of COVID-19 / Pandemic on the Indian Handloom, Textiles, and Apparel Industry. “We have placed high emphasis on the sector to create jobs for our local population and to contribute to the country’s GDP and exports,” he added.  

“I have been interacting with members of the textile industry, both within our state and outside. The common refrain is that the recovery will be very slow and will be contingent upon the Western world commencing regular operations. Several companies have been their orders canceled and shipments put on hold and are facing zero revenues and cash flows,” KTR said.

“I am seriously worried about the sustenance of the industry and the resulting impact on the livelihoods of millions of workers. On the other hand, it is obvious that the large global consumers will have to de-risk their supply chains and reduce dependence on major suppliers like China. This offers a huge opportunity for India to attract further investments to meet the resurgence in the consumption a few months down the line,” said Minister KTR.

Minister KTR also said, “In this scenario, I am of the opinion that we should address the issue of protection of livelihoods as well as exploit the emerging opportunities for creating new jobs and increase our exports. I would like to make the following suggestions to meet the immediate and medium-term requirements to protect our industry and create more jobs for our people.”

He made a few suggestions to meet the immediate and medium-term requirements to protect our industry and create more jobs for our people. The suggestions include,

Short-term policy support required.

Resumption of operations- Reassurance to workers.

Wage Support: Providing wage support of up to 5% of wages, contingent on continued employment of the workforce. This support can be given for a period of up to 6 months, in the form of a long-term loan which the industry would need to repay in installments after a stipulated period. I understand Bangladesh Govt., is giving a similar support package to its garment industry.

Statutory payments: Allow the industry a one-time extension of 3 months for the deposit of statutory dues of PF and ESI. This will release some cash for the industry.

Banking support

Facilitate higher temporary credit facilities (up to 30% of current limits) to meet the cash losses during this slowdown, so that it will enable the industry to meet its obligations towards its vendors and statutory payments so that the entire supply chain is protected. The Govt. of India could consider funding this through a concessional line of credit so that the banks are adequately supported, and the funds return to the Govt in due course.

Asset classification: RBI may be requested to allow the banks to do not downgrade loan accounts by giving a grace period of 6 months to 1 year. Otherwise, many regular accounts may be classified as NPAs affecting their long-term track record.

(c ) Incentives to Exporters

Govt. of India has announced the Rebate of State and Central Taxes and Levies (RoSCTL) scheme for the apparel and made-ups segment. It is important that RoSCTL is extended to other segments like yarn and fabric as well. This will enable the intermediate segments to improve their operational sustainability.

Govt of Inda may also consider additional incentives to exporters for a period of 1 year to tide over this crisis. Any incentives to exporters will also indirectly support the domestic value chain.

GST refunds: A common refrain from the industry is for expediting the pending refunds of GST, which will release cash and in turn enable the industry to meet payments to workers and other vendors.

In order to support the handloom sector in these difficult times, steps should be taken to enable a wider market for the piled-up handloom fabric and finished products on national and international e-commerce platforms,

Further, in order to encourage a faster reboot of the sector, Govt of India could consider a 50% yarn subsidy across the handloom industry. As a special case, the GST Council should also consider a complete waiver of GST on handloom products for a period of 2 years to boost the sector.

Our Government has taken various steps to support the handloom weavers so that they are able to regain their market with their niche products. We have recently completed a detailed census of handlooms across the state including geo-tagging of each and every handloom in the state so that we can provide directed benefits to the weavers working on these handlooms and ensuring that the financial support is directed to the deserving weavers. A similar initiative can be considered at the national level as well.

Promoting Manmade Fibres: Globally, the proportion of manmade fibers in total fiber consumption is more than natural fibers, unlike in India. However, the trend in India is moving towards manmade fibers with the growth of segments like fashion wear, activewear, etc., in line with global trends. Further, the growth of technical textiles will also require synthetic materials. New investments are more likely to be in these segments. To support this, correcting the inverted duty structure under GST on man-made fibers would be another strategic step required.

Cotton procurement support: Transfer subsidies directly to cotton farmers’ accounts through direct benefit transfer (DBT) instead of offering a minimum support price (MSP) for their produce. This will avoid the distortion of prices of raw materials which are inputs to the downstream spinning industry.

Attracting Investments by Industry:

As you would be aware, the ability of the Indian industry to make fresh Greenfield investments is limited given the current scenario. However, the investment scenario will improve in a few months, and it will be necessary for us to prepare ourselves to make these investments happen.

In order to enable the prospective FDI investors to look at India more favorably, it will be necessary to provide some form of support towards wage cost and power cost, which are two major factor costs for the industry. Here, I would request the Govt of India to consider the following:

Reintroduce the scheme for supporting the employer’s contribution towards PF, ESI, as done earlier for the apparel and made-up sector, and extend it for all segments.

Provide some additional wage subsidy for a limited period linked to certain commitments from the industry.

The above measures would be a huge boost in supporting the existing industry and attracting new investments in textile, technical textile, and apparel sectors and will take the reforms initiated last year through lowering of corporate tax rates, further. I am confident that we will also be able to attract MNCs planning to shift their manufacturing from high cost and/or high-risk geographies to India.

He concluded the letter by saying, “Looking forward to partnering with the Ministry of Textiles in these challenging times.”