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The Textile Ministry is hopeful of full utilisation of the ₹ 10,683 crore corpus for the Production Linked Incentive scheme for textiles with as many as 69 companies having already registered for it of which 42 companies have filed their draft application and eight companies their final ones, a senior official has said.
“The response from investors has been good so far with a substantial number of registrations and draft applications already been made. Applicants generally put off filing their final applications till the deadline, that was extended to February 14, so we expect numbers to increase towards the end. Investors were also waiting for notification of new HSN codes for technical textiles which have been provided in the Union Budget,” Textiles Secretary Upendra Prasad Singh told BusinessLine.
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Extension by one year of concessional corporate tax for new units will help PLI in textiles: Textile Secretary
Textile Secretary says all schemes for MSMEs announced in the Budget will benefit textiles as 90 per cent of units are in that sectorThe Ministry may be able to select 50-60 companies for the scheme but the actual number would be tied to the size of the proposals coming in. “This is a fund limited scheme. The number of beneficiaries would depend on how big the companies are and what kind of projections they make. It may be possible that the available fund gets exhausted with 20-25 companies. Or it may be possible to accommodate 60-70 companies,” Singh said.
The PLI scheme for textiles, which has been allocated a budgetary outlay of ₹10,683 crore, covers 40 MMF (man-made fibre) garment items, 14 MMF fabric items and 10 technical textile items. The objective is to push the production of MMF and technical textiles in India, where the country has been lagging behind, but which together contribute to an estimated two-thirds of international trade in textiles. India has been traditionally strong in cotton textiles.
Benefits under the scheme
Benefits under the PLI scheme are to be provided for five years on incremental turnover achieved. The scheme is divided into two parts with higher incentives of up to 15 per cent of turnover (in the first year) for companies investing a minimum of ₹300 crore and 11 per cent for companies investing a minimum of ₹ 100 crore.
Thereafter, the incentive earned will be one per cent lower every year for the next four years on achieving minimum turnover of ₹600 crore in the first year and incremental turnover of 25 per cent for investors under part one, and a minimum turnover of ₹200 crore in the first year and an incremental turnover of 25 per cent in the following four years for investors under part two.
Singh said the applications that have been made so far are a mixture of big companies and smaller companies. “If we are in a situation that we need to select amongst the applicants, we will go by the selection criteria mentioned in the guidelines and also scrutinise the projections made by the companies to see if they are feasible,” the Secretary said. He added that the Ministry expected to exhaust the provision of the scheme in one go.
As per government estimates, the PLI scheme for textiles will attract fresh investment of more than ₹19,000 crore and cumulative turnover of over ₹ 3 lakh crore over the next five years. It is also expected to generate additional direct employment of 7.5 lakh and indirect employment of several lakhs more.
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