Ministry of Textiles has initiated various measures for implementation of Government Scheme

Mumbai, July 21, 2016

The World Bank will release the Doing Business Report 2017 in the month of October this year.  The World Bank team is visiting India for one week in Delhi and Mumbai.  They will be meeting all stakeholders including Government officials, consultants as well as users.  Government has taken number of progressive steps to improve India’s performance in Doing Business Report, 2017.

Ministry of Textiles has initiated various measures for implementation of Government much appreciated scheme of ease of doing business.  The steps taken by Ministry of Textiles, Government of India through Office of the Textile Commissioner and Textiles Committee are as under :-

1.         Online Hank Yarn Return and self certification : Textile  Commissioner    has amended   the  existing   Hank  Yarn  Packing Notification    No.  04/TDRO/8/2010   dated 31.03.2010,   vide  Notification    No.  05/TDRO/8/2015 dated   02.09.2015,     in terms  of which  the Quarterly  Hank  Yarn  Return  is  necessarily  required  to be submitted  on-line   only. Accordingly, at present all the yarn manufacturing units are submitting the mandatory quarterly hank yarn packing returns duly signed by Chartered Accountant and self-certified by them (unit) through online web portal only, which reduces the time and unnecessary burdens to the Yarn Manufacturing Units/Industries and make submission easy.
2. i-ATUFS :  Towards the objectives of Ease of Doing Business, Textile Commissioner Office has developed i-TUFS software with timelines for each activities and automatic alert mechanisms so as to ensure that the timelines are adhered to at each level at which the activity is to be performed. The same would also have First-In-First-Out (FIFO) system with prioritization for energy saving machines. All UIDs are being issued in this manner, using this software. Through this software now individual beneficiary will submit the details immediately after sanction of the term loan by the specified banks under the scheme for issuance of UIDs.  The individual beneficiary now can track its cases and claims thereof of the all loan accounts under TUFS from i-TUFS system itself.

Similarly for RR-TUFS also, i-TUFS software provides facility to the entrepreneurs/ units to upload their application directly to the Textile Commissioner.  This in fact enabled a number of units to take benefit of RR-TUFS even in the cases where bank had not uploaded their applications.

3. Facilities for import and export and to reduce the turn around time in sample testing : Textiles Committee which has currently 16 laboratories across India, has proposed to establish 5 more laboratories at Cochin, JNPT, Tuticorin, Bangalore Airport and Indore, in addition to upgrading its existing laboratories at Hyderabad, Kanpur and Ahmedabad to facilitate the import and export and also to reduce the turn around time. Textiles Committee has already undertaken the infrastructure work and procurement of various required instruments and the Laboratories scheduled to be operational by October ’16 at Cochin and December’16 at JNPT respectively.Textiles Committee Laboratories are committed to issue test reports related to mandatory tests in imported textile consignments within 48 hours as stipulated by Task Force. Textiles Committee has created facilities to receive samples from imported consignments on 24 x 7 basis.  Textiles Committee has already initiated online acceptance of testing charges with the help of State Bank of India.   Laboratories of Textiles Committee are linked to ICE Gateway of Indian Customs for online transmission of test reports through VPN connectivity.   Trial run has been conducted for exchange of information between Customs and Textiles Committee.   Shortly, all the communications between Customs and Textiles Committee with reference to testing of imported consignment for mandatory and other parameters will be through this VPN connectivity.
4. Star Rating of Ginning & Pressing Factories : Since the year 2009 the scheme is being implemented by Textiles Committee for Star Rating of modernized ginning and pressing factories through out the country.  Rating is the process of placing modernization ginning & pressing units into classes between Five Star to Single Star, based on the quality of infrastructure comprising (i) machinery, (ii) civil structural items & (iii) management practices including contamination level in ginned cotton.  The rating assigned to the unit will be performance indicator that will be of concern and interest to both the cotton trade and textile mills alike since the quality of the cotton processed in the ginnery will greatly depend on excellence of its infrastructure.

The scheme is in voluntary mode. Till June 2016, total 1057 modernized G & P units have been registered.  Out of these registered units 1017 units has already been assessed for star rating and 24 units awarded highest Five Star rating, 110 units awarded Four Star rating , 256 units got Three Star Rating and the remaining units are  awarded less than Three Star.

Objectives of rating are as under:

• To encourage modernization of ginning & pressing factories
• To recognize modernized  ginning & pressing factories by Star Rating
• To promote quality culture in ginning industries
• To enable user industries (Spinning) for sourcing quality cotton
• To create a brand for clean cotton

5. Package for Garment Sector under ATUFS : In the meeting of the Union Cabinet held on 22.06.2016, under the Chairmanship of Prime Minister, additional incentives for textile and apparel sector has been approved. The additional incentives inter-alia cover providing production incentive through Technology  Up-gradation Fund Scheme (TUFS) linked Capital Subsidy. At present, under ATUFS, 15% Capital Investment Subsidy (CIS) is provided to the garmenting sector on capital investment for eligible machines, with a cap of Rs. 30 crores. An additional subsidy of 10% will be provided to garmenting units enhancing the cap to Rs. 50 crores, based on achievement of the projected production and employment generation, as given in the Detailed Project Report (DPR).

The package would promote employment generation, economies of scale and boost exports.  It is expected that one crore jobs will be generated in the textile and apparel industry over next 3 years.  The steps will lead to a cumulative increase of US$ 30 bn. in exports and investment of Rs. 74,000 crores over next 3 years.  The majority of new jobs are likely to go to women since the garment industry employs nearly 70% women workforce. Thus, the package would help in social transformation through women empowerment.

Enhancing 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 is expected to cost the exchequer Rs. 5500 crores but will greatly boost the competitiveness of Indian exports in foreign markets.  Drawback at All Industries Rate to be given for domestic duty paid inputs even when fabrics are imported under Advance Authorization Scheme.

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.

6. Labour issues addressed in the package for Garment Sector under ATUFS are:

1. Employee Provident Fund Scheme Reforms

• Govt. of India shall bear the entire 12% of the employers’ contribution of the Employers Provident Fund Scheme for new employees of garment industry for first 3 years who are earning less than Rs. 15,000 per month.
• At present, 8.33% of employer’s contribution is already being provided by Government under Pradhan Mantri Rozgar Protsahan Yojana (PMRPY). Ministry of Textiles shall provide additional 3.67% of the employer’s contribution amounting to Rs. 1,170 crores over next 3 years.
• EPF shall be made optional for employees earning less than Rs. 15,000 per month
• This shall leave more money in the hands of the workers and also promote employment in the formal sector.

1. Increasing overtime caps

• Overtime hours for workers not to exceed 8 hours per week in line with ILO norms.
• This shall lead to increased earnings for the workers

1. Introduction of fixed term employment

• Looking to the seasonal nature of the industry, fixed term employment shall be introduced for the garment sector
• A fixed term workman will be considered at par with permanent workman in terms of working hours, wages, allowanced and other statutory dues.

7. Margin Money Subsidy (MMS) under TUFS for Powerloom & other MSME units:

• Started implementation in the year 2004.
• Since inception, GOI subsidy of Rs.790.28 crore has been disbursed against 9847 cases.

The subsidy under the scheme is transferred directly to the beneficiary through Direct Benefit Transfer (DBT) in their account i.e. through NEFT/RTGS.

8. Collection of Statistics on Cotton: Ministry of Textiles, Govt. of India,  has issued a Notification No.S.O.786 (E) dated 27^th Feb, 2013 appointing the Textile Commissioner as the Statistical Officer in respect of the Geographical units falling under the Jurisdiction of Regional offices for collection of statistics related to cotton from the Independent Ginning factories, Independent Pressing factories, Cotton Ginning & Pressing factories, Traders, Surgical Cotton or Cotton Wadding manufacturing units and Cotton Textile Mills.

Accordingly, all Independent Ginning factories, Independent Pressing factories, Cotton Ginning & Pressing factories, Traders, Surgical Cotton or Cotton Wadding manufacturing units and Cotton Textile Mills have to submit the monthly returns to the Textile Commissioner through its Regional Offices.  In this regard, web based system for registration of the units and filing of monthly statistical returns online have been developed by Office of the Textile Commissioner.