Support by various State Governments to the Apparel sector

(AN ARTICLE WRITTEN FOR CHAIRMAN, AEPC FOR ET RISE)

Employment is the key to transforming a community. State Governments have now realized the enormous potential of the Apparel sector to create jobs and empower women. They have been quick to take action and create an investor friendly policy direction and environment to entice those interested in striking or spreading roots on their soil. This presents a rare opportunity for MSME Entrepreneurs to set up or expand their manufacturing facility.

Recent reforms in the country have made it clear that the role of the State stands redefined. With the transformed role of the Government, from a mere monitoring agency to collaborators and partners in growth, the climate could not be friendlier for any MSME looking to grow.

Research and records have established the high potential of the Apparel sector to create about 70 jobs for every Crore rupees invested, much higher than the other manufacturing sectors. As high as Rs. 26000 Crores are given out as salaries and wages every year by this industry. The most significant advantage lies in the high employability of women in this sector at every level- from a sewing machine operator to the CEO of a brand. While the Ministry of Textiles has left no stone unturned to support the sector at the national level, the State governments have laid out extensive policies to dole out further benefits for entrepreneurs and brands.

It has also been well understood that ease of doing business is the single most important window to a world of opportunities and growth. Apart from providing incentives in kind and financial benefits to entrepreneurs, each state government has put in focussed effort to reduce cumbersome documentation in the process of starting something new. On this metamorphic journey from red tape to red carpet, well appointed single points of contact have been created for understanding of policies and availing the benefits. While the going may be still difficult in some lands, others have made drastic efforts to improve the processes involved. I will discuss about the positive support extended by some State governments here, in particular and a few salient features of their respective policies.

The states which have constituted special policies for significant benefit of Apparel manufacturers include Chhatisgarh, Gujarat, Jharkhand, Karnataka, Orrisa, Uttar Pradesh and West Bengal. Other states, like Uttarakhand and Telangana, have also been proactively working on wooing the Apparel manufacturers to their land. There is a common myth about such policies being friendly only for those with deep pockets, however, i would like to differ on this and clarify that the pre conditions and barriers have been lowered and set suitably.

Chhattisgarh , a young state, formed in 2000, has been quick to accelerate its process of industrialization, realising its importance in creation of livelihoods and a consequent better life for it’s people. Chhattisgarh has been declared one of the best fiscally managed states by the Reserve bank of India- which speaks a lot about the ease of doing business in the state. It has become a hotbed for Startups across a variety of sectors from IT to power and medicine. Eighteen years young a state, it provides an obvious advantage of being the first mover and capturing the domestic markets as well. The state boasts of a very rich labour pool and it is important for an Entrepreneur to know that Chhattisgarh has one of the lowest reported loss of man- days attributed to labour problems, in the country. Due to rich resources of coal, it is one of the few power surplus states of the country. The state is one of the leading producers of Tussar and Kosa Silk in the country. An Apparel park is being established in a huge area of 4 hectares near Raipur. The state government has extended many investor friendly benefits – it will reimburse 50% of the amount spent on new and existing Micro, Small, Medium, Large industries and Mega projects established by the entrepreneurs, subject to conditions. Exemption is also given on entry tax and land acquisition/ leasing to eligible Manufacturers and MSMEs. There is a subsidy on loan interest and benefit on Quality certification and Patent registration as well. Not only will the state provide exemption/ concession on allotment of land in industrial parks, but, also a full exemption on electricity duty for the first many years. For complete details one must visit https://industries.cg.gov.in/pdf/policy2014-19/Industrial%20Policy%202014-19%20Translated%2012Feb2016.pdf. According to DIPP, Gujarat is the second preferred investment destination in India. One of the most developed states industrially, Gujarat has a world class infrastructure with 42 ports and 19 airports.  Gujarat is the largest denim producer in India and third in the world. The state government has introduced a textile policy with various schemes to provide assistance in the form of Interest subsidy, power tariff and VAT exemption. The government provides great support both in acquisition and upgradation. There is a lot of government interest in technical textiles. Assistance is provided for energy conservation, water conservation and environmental compliance to manufacturing units. Rent assistance/ shed on rent and assistance for building dormitories for workers is provided. The state Government also provides for 50% of the worker wages per month, for a period of 5 years, as payroll assistance to new enterprises. It may be wise to go to https://ic.gujarat.gov.in/documents/news/17-10-2017-14-08-23gujarat-garment-apparel-policy-20172-new-17102017.pdf

Employment is the key to transforming a community. State Governments have now realized the enormous potential of the Apparel sector to create jobs and empower women. They have been quick to take action and create an investor friendly policy direction and environment to entice those interested in striking or spreading roots on their soil. This presents a rare opportunity for MSME Entrepreneurs to set up or expand their manufacturing facility.