Maharashtra delinks subsidy from bank loans

The textile industry in Maharashtra received a great impetus, when the BJP-led government in the state decided to provide subsidy to textile owners that would not be linked to bank loans. Earlier, this subsidy was credit-linked and only those who had availed a bank loan were eligible for this government benefit.

This policy decision to provide capital subsidy that would be delinked from bank loans was taken last week.

A major section of the powerloom owners of Maharashtra, who are Muslims, had made this demand for delinking of the subsidy, as they believed usury and bank loans are against their religion. This had led to a large number of weaving units out of the purview of modernisation.

Under the current policy in the state, spinning mills, cotton ginning, processing and printing units would get 35 per cent capital subsidy; while technical textiles and composite units will receive 30 per cent; and powerloom and other textile-related units 25 per cent subsidy. There will be an additional 10 per cent capital subsidy for the powerloom owners from the cotton belts of north Maharasthra, Marathwada and Vidarbha.

Hailing the government’s decision, Founder-Secretary of Malegaon Industries & Manufacturers Association (MIMA) Aleem Faizee said, “This is a welcome decision. This had been a long-standing demand of the loom owners. Earlier, this proposal had gone till the Centre, but no action has been taken. This will majorly boost the industry.”

The 24 lakh-odd powerlooms across the country are part of the nation’s textile industry, contributing to India’s second largest employment sector, directly employing over 35 million people. Out of these massive numbers, the state of Maharashtra dominates the weaving sector. Besides, out of the total number of powerlooms in the country, Maharashtra has almost half the number, with Bhiwandi having 8 lakh, Malegaon 2 lakh and Dhule 10,000 powerlooms. These three areas alone account for more than 80 per cent of the state’s powerlooms and over 40 per cent of that of the country. Incidentally, around 90 per cent of their owners as well as workers belong to the Muslim community. So this decision was a much-needed and a very welcome step taken by the government.

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Over the past 14 years, the Union government has spent over Rs 75,000 crore under the various phases of the Textile Upgradation Fund Scheme (TUFS) to bring the country’s textile industry at par with global standards. The scheme was meant to help modernise and upgrade the technology of all sectors in this industry. The state also provides a certain component towards the subsidy, but almost all government aid so far had the condition that a powerloom owner must take a bank loan to be eligible for the subsidy.

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