The Karnataka state government has announced its ambitious new textile policy for 2013-18 and has set a target of attracting an investment of Rs 10,000 crore. It wants to make the state a preferred textile destination and create employment opportunities for over five lakh people during the five year period

While releasing the policy document on 17 November, the textile and ports minister Baburao Chinchansur told media persons that the Karnataka was a pioneer in formulating textile policy. He further added that the State has been classified into three zones and all areas falling in Bangalore Urban district, except Anekal taluk, will not get any incentives. However, backward districts with potential for textile activities will get the maximum benefits. Relatively developed areas from the perspective of a textile value chain will get marginally fewer benefits.

One of the key features of the new policy is that interest subsidy will be provided to small and medium investors in projects worth up to Rs 99 crore. This amount will be a part of the amount earmarked for credit-linked capital subsidy. MSMEs with a maximum investment of Rs 10 crore will be provided credit-linked subsidy of 15-20 per cent with a ceiling of Rs 2 crore. For units investing Rs 10-99 crore, credit-linked capital subsidy of 15-20 per cent will be provided with a ceiling of Rs 6 crore.

Entrepreneurs belonging to Scheduled Castes and Scheduled Tribes will be provided an additional subsidy of 20 per cent and those belonging to minority, ex-serviceman, physically challenged and women categories will be provided with an additional subsidy of 5 per cent. Under the special credit-linked capital subsidy plan, an additional 10 per cent on the value of plant and machinery of a maximum of Rs 25 lakh and an additional 20 per cent on the value of plant and machinery of maximum of Rs 30 lakh for integrated textile units will be given.

For existing units taking up modernisation, a subsidy of 15-20 per cent with a ceiling of Rs. 1 crore will be provided while sick cooperative spinning mills will be given a subsidy of 20 per cent with a ceiling of Rs 2 crore for their revival and modernisation.

Under the policy, new units will be provided 100 per cent entry tax reimbursement and 100 per cent stamp duty reimbursement in Zone I and 50 per cent in Zone II.

For mega projects incentives will not exceed 15 per cent of the project cost or a maximum of Rs 50 crore. Power subsidy of Re 1 per unit will be provided to all new units.

The government will set up 145 skill development centres in various disciplines of textiles for the benefit of the unemployed youth.

For textile industries establishing their own infrastructure facilities at textile parks in green field and brown field zones a subsidy of 40 per cent with a ceiling of Rs. 20 crore will be provided. The government will also provide a financial assistance of Rs 10 crore for establishing a centre of excellence for textiles and for the overall and integrated development of the sector.