Gujarat Textile Policy: Capital Subsidy (Fiscal Incentives to Labour Intensive Unit)

Gujarat Textile Policy: Capital Subsidy (Fiscal Incentives to Labour Intensive Unit)

The “Gujarat Textile Policy” has been established by the Industries and Mines Department with the primary goal of fostering a dynamic textile ecosystem in Gujarat. This initiative is designed to generate substantial employment opportunities and enhance investments across the textile sector.

Overview of the Scheme

Launched by the Industries and Mines Department of Gujarat, the “Gujarat Textile Policy” serves as a comprehensive framework aimed at boosting investments within the textile sector. This policy is particularly focused on fortifying the value chain within various sub-sectors, including garments, apparel, and technical textiles. Commencing from October 1, 2024, and continuing until September 29, 2029, the policy emphasizes eco-friendly practices and aims to reduce the carbon footprint of the industry, making it both globally competitive and environmentally sustainable.

The specific component “Capital Subsidy (Fiscal Incentives to Labour Intensive Unit)” offers financial support to qualifying industrial units through subsidies on their capital expenditures. The amount of subsidy is determined based on the location category and the nature of the activities undertaken by the unit.

Benefits of the Scheme

Under the Gujarat Textile Policy, financial assistance is provided as follows:

Note: The term Eligible Fixed Capital Investment (eFCI) refers to the components of investment made during the designated Eligible Investment Period. If an industrial unit is receiving a capital subsidy from any Central Government scheme, the combined total of subsidies received from both State and Central sources must not exceed the total amount of the term loan disbursed.

Eligibility Criteria

• The industrial unit must be classified as a Labour Intensive Unit.
• A Term Loan must have been secured for the project.
• Commercial production must commence prior to applying for subsidy disbursement.
• Applications must be submitted within one year from the Date of Commercial Production (DoCP).
• The total subsidies received from both State and Central sources should not surpass the total term loan amount disbursed.

Eligible Activities

The following activities qualify under the scheme:

• Activity 1: Garments, Apparel & Made-ups, Technical Textiles (including Composite Unit)
• Activity 2: Weaving (with or without preparatory), Knitting, Dyeing & Processing, Texturising, Twisting, Embroidery, and MMF Spinning for yarn production from Polyester Staple Fiber (PSF) / Viscose Staple Fiber (VSF) (Excluding Cotton and Synthetic Filament Yarn Spinning).

Definition of Labour Intensive Unit

A Labour Intensive Unit is defined as a new industrial unit that must provide employment for at least 4,000 individuals, with a minimum of 1,000 being female employees, registered under the EPF scheme. Existing units that expand or diversify their operations during the scheme’s duration and generate new jobs for at least 4,000 individuals are also classified under this definition.

Application Process

Offline Application

The application process involves the following steps:

1. Application for Registration: Submit an application to the Industries Commissioner in the prescribed format within one year from the date of loan disbursement, production commencement, or the operative date of the policy, whichever is applicable.
2. Once the application is received, it will undergo scrutiny and verification. Following this process, a registration certificate will be issued by the Industries Commissioner.

Application for Provisional/Final Eligibility Certificate:

• For MSME Units with GFCI up to ₹10 Crore: After DoCP, the unit must apply to the General Manager at the District Industries Center.
• For MSME Units with GFCI over ₹10 Crore and up to ₹50 Crore: After DoCP, an application must be forwarded to the MSME Commissioner for a Provisional Eligibility Certificate within one year from DoCP or the date of the GR issuance, whichever is later.
• For Non-MSME Units: Following DoCP, an application must be submitted to the Industries Commissioner for a Provisional Eligibility Certificate within one year from DoCP or the issuance of the registration certificate, whichever is later.

Contact Information

For further inquiries, reach out to:

• Industries Commissionerate
• District Industries Center

Understanding Gross Fixed Capital Investment (GFCI)

GFCI encompasses investments made in buildings, machinery, electrification, tools, equipment, utilities, effluent treatment plants, and additional assets, excluding land, necessary for manufacturing products. Only assets acquired and paid for during the Eligible Investment Period will be recognized as GFCI for determining eligible Fixed Capital Investment under this policy.

Understanding Eligible Fixed Capital Investment (eFCI)

eFCI includes the components of investment made during the Eligible Investment Period. This specifically includes new buildings, which must be constructed or acquired as new for the project. Costs for new buildings will be calculated based on actual costs or the Schedule of Rates (SOR) from the relevant year of the R&B Department of the State Government, whichever is lower. Note that costs related to old buildings or repairs do not qualify as eFCI.