Vishal Chiripal - Spg.proj Final

8/11/2019 Vishal Chiripal - Spg.proj Final

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COMPARATIVE ANALYSIS

OF TEXTILE POLICIES OF INDIA

Vishal ChiripalDirector

hiripal Group of ompanies


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INDIAN TEXTILE INDUSTRY AT A GLANCE

Indian Textile Industry :-

Textile industr accounts for 12% Of Industrial Production Which Is 4%Of GDP.

nd

11% Share Of The Countrys Total Export.

India, the worlds second-biggest cotton grower, had produced a record36.5 million bales in the 2012-13.

India accounts for about 22 percent of the worlds spindle capacity.

Spinning & Weaving industry has been able to keep pace withinternational technological trends by taking advantage of the technologyup gradation fund scheme (TUFS).Source : TXC Office, Mumbai


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TOTAL SPINDLEAGE AND LOOMS IN INDIA 2012-13

Installed Capacity World India Share inWorld

Indias Rank

Spinning (in millions)

Spindles (Cotton 205 48 22% 2 (China)

Spindles (Wool) 15 1.0 7% 3 (China)

.

Weaving (in millions)

. .

Shuttle less Looms 1.6 0.15 9% 4 (China)

. .

Total Looms 9.7 4.85 50% 1

SOURCE : CITI (CONFEDERATION OF INDIAN TEXTILE INDUSTRY)


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COTTON GROWING AREA AND ITS OUTPUT (In Millions)

Rank State2012-13 2013-14*

Area Production % of Area Production %ro n.1 Gujarat 24.97 8.9 24.38 26.91 11.6 31.002 Andhra Pradesh 24 8.4 23.01 21.42 7.2 19.003 Maharashtra 41.46 7.9 21.64 38.72 8.1 21.604 Haryana 6.14 2.5 6.85 5.57 2.3 6.00

. . . . . .

6 MadhyaPradesh 6.08 1.9 5.20 6.21 1.9 5.30

a as an . . . . . .8 Karnataka 4.85 1.5 4.11 5.78 1.8 5.009 Tamil Nadu 1.28 0.6 1.64 1.17 0.5 1.30

10 Orissa 1.19 0.4 1.1 1.34 0.4 1.0011 Others 0.51 0.6 0.51 0.33 0.2 0.5012 ran o a . . . .

Source : The Cotton Corporation of India


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Gujarat has long been recognized as the countrys textile hub where Ginning,Pressing, spinning, Weaving, Processing, RMG etc., are the major Contributor tothe textile industry of the country.

ro uces . m on a es o e o a pro uc on n n a , n -Gujarat was the largest producer of raw cotton in the country.

Gujarat is also the highest exporter of cotton.

Gujarat has the distinction of being the highest contributor of manmade fibers

(31%) and manmade filament yarn (38%) in the country.

Gujarat is the largest producer of denim in India (65 to 70%) and the third largest.

Source : GCCI


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ANALYSIS OF TEXTILE POLICIES

State Gujarat Karnataka Maharashtra Rajasthan Tamilnadu

Policy (Gujarat Textile Policy Suvaran Vastra (Textile policy of Special Policy noteev se ee - a aras ra

17)cus om zepackage fortextile sectorenterprises

-Hnadloomsand textile

vaupto 2020)

Capital No such subsidy in theolic .

No suchsubsid in the

Yes 10%ca ital subsid

No suchsubsid in

No suchsubsid

policy. for new textileprojects. the policy. in thepolicy.

The interest Yes Subsid is 12.5% interest Yes No such

Subsidy

subsidy will be inaddition to thatprovided by GOI.

7% for s innin

availableinvestment upto 99 crores.

subsidy withoutany ceiling.

Interestsubsidy @5% p.aadditional

subsidyin thepolicy.

unit andgarment, made-up units and 6%for technical

subsidy of 1%on investmentof > Rs 25crores. 7%

textiles andremainingIndustry 5%.

for technicaltextiles.


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State Gujarat Karnataka Maharashtra RajasthanTamilnad

u

PowerSubsidy

Power tariff subsidy@ Rs 1 per unit for a

period of five years.

Powertariff

subsidy @

No suchsubsidy in

the policy.

No suchsubsidy

in the

No suchsubsidy

in the

unit.. .

.

StampDutyReimbu

100 %Reimbursement.

Yes, 50%to fullreimburse

No suchsubsidy inthe policy.

50%exemptionfrom

No suchsubsidyin the

rsement ment withrespect to

zone.

payment ofstamp

duty.

policy..


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State Gujarat Karnataka Maharashtra RajasthanTamilnadu

Entry TaxReimburseme

nt

by the unit onpurchases of

intermediate

.in the policy. sement

of 60%

of VAT

subsidy inthe policy.

material.

EnvironmentRelated

Assistance up to50% with maximum

(a)50% of the Projectcost or Rs. 5.00

No such subsidyin the policy.

No suchsubsidy

Yes.

c emes ce ng o s -crore for commoninfrastructure inParks and other

crores, w c everis less

(b)In case ofHandloom sector-

n epolicy.

ex es ac v es. o e pro eccost or Rs. 1.00crore, whichever is

less.CommonInfrastructure/ Textile Park /Cluster

50% with maximumlimit of Rs. 10 crore(Rs. 30 crores fors innin ark of

Yes, 10 to 40% of theproject costDepends on zoneand ro ect cost 10

Yes. No suchsubsidyin the

olic .

Yes.

Development total project cost. to 20 crores).


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State Gujarat Karnataka Maharashtra Rajasthan Tamilnadu

Skill i) Assistance up to Yes, No such subsidy No such No such

nt / Training su ec o

max. Rs.3 crore,excluding landcost for setting

ss s ancewill be limitedto Rs. 1 crorefor each

n e po cy. su s y n epolicy.

su s y n epolicy.

up rg.Institution.

ii) Allowance toweavers @ Rs.

ns u on.

ay ordays, jobbers @Rs. 300/day for 6days for training .

Development andcapacitybuilding

policy. nt of 50%ofthe cost.

in the policy.

subsidy in thepolicy.

is availableonly forhandloom

support


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Sr.No.

Type of Cluster Location

1 Textiles Ginning Ahmedabad, Manavadar, Kadi, Vijapur, Gondal,

Dholka2 Textiles Spinning Ahmedabad, Dholka, Kalol, Chhatral, Kadi, Rajkot

3 Textiles Powerloom Ahmedabad, Surat, Kalol, Chhatral, Dholka

4 Textiles Khadi Wadhvan and Bhavnagar 5 Textiles Printing Jetpur

an r n ng

6 Textiles Finishing Ahmedabad, Surat and Bhuj

,

8 Jari Printing Surat

9 Read made Ahmedabad and Va i

Garment


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SEGMENT-WISE PROFILE

NO. OFUNITS

Cotton Ginning & Pressing 941 Mehsana, Rajkot, Bhavnagar, Ahmedabad, Amreli

Spinning & Composite 144 Ahmedabad, Silvassa

Woven RMG 2362 Ahmedabad

Power Processing 513 Ahmedabad and SuratHand Processing 1146 Rajkot

Home Textiles 60 Ahmedabad

Texturising/ Twisting/ TFO 5053 Silvassa, Surat

Embroidery 14136 Surat

Machinery Mfg. 150 Ahmedabad, Surat

Source : CAB


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Economic Analysis


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Cotton Ginning &Pressing SpinningWeaving/Knitting

Processing RMG

PROCESS FLOW CHART FOR TAMILNADU

CottonGinning &Pressin Transportation Spinning

Trans ortationWeaving Processing RMG

n ng


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ECONOMIC ANALYSISGUJARAT VS TAMILNADU

Sr.No.

Descriptions of points/ Benefits

Gujarat State Tamilnadu State

1 Availability of Cotton Within Gujarat Procured from Gujarat

2 Transportation cost per Within Gujarat : Rs. 0.60 From Gujarat to. . . .3.50 Per kg.

3 Commission on cotton Appx. Rs. 0.60 per kg Appx. Rs. 0.60 per kg

per kg (0.5 %) (0.5 %)4 Transportation cost of Within Gujarat From Tamilnadu to

. .Rs. 3.50 to 4.00 per kg

5 Commission on yarn per 0.5% 0.5%kg

6 Delivery period andlace

Within 24 hours anywherein Gu arat.

5-7 days.


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r.No

.

escr p ons opoints

/ Benefits

u ara a e am na u a e

9 Port facility forexport

Yarn Manufactured inGujarat :Easy availability of port

Yarn manufactured inTamilnadu :

Available but cost is highfacility with low cost

10 Freight of machinerywith all taxes

Rs. 260 per spindle Appx. Rs. 27000 per

truck.

Rs. 67 per spindle Appx. Rs. 7000 per

truck Total truck may be

240 for 25000s indles

Total truck may be 240for 25000 spindles


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Sr.No

Descriptions of points


. / Benefits

11 Taxes (VAT/CST) oncotton

VAT 5% (Subsidy fromGovt. of Gu arat

CST 2%

12 Taxes (VAT/CST) on VAT 5% (Subsidy from CST 2%

13 State Govt.

VATElectric bill

VAT 5%Rs. 1 per Unit

NilNil

Govt. Duty inElectric bill

Waived Nil


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Sr.No.

Descriptions of poin ts / Benefits Gujarat State Tamilnadu State

en ra ov .Benefits

Interest subsidy

Project upto 250 crores: 2 % stand alone s innin Project upto 250 crores: 2 % stand alone s inninunits

5 % to the spinning units withforward integration.

units 5 % to the spinning units

with forward intigration

15 Availability ofElectricity

24 hours 15 to 17 hours

16 Cost of Electrici typer unit

From power plant Rs.4.85 per Unit Rs. 8 per Unit (Appx.)From state govt. Rs.7.25 per Unit Rs. 5.50 per Unit (Appx.)

17 Labour cost per Shift8 hours

Rs. 270 to 320/day Rs. 230 to 250/day


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Sr.No.

Descriptions of points/ Benefits


18 Availability of manpower

O erators Unskilled o erators Available man ower\Technician are available in

Gujarat.Skill upgradation

due to long termpresence of spinningindustries.

through traininginstitute/Center/Organization.

19 Availability Local andExport Market of-

Cotton Yes NoYarnFabricsProcessing

YesYesYes

YesYesNo

Garment Yes Yes


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ECONOMIC ANALYSIS OF SPINNING UNITGUJARAT VS TAMILNADU

SR. NO. PARTICULARS

GUJARAT TAMILNADU

TOTAL (IN TOTAL (IN.

CRORES) .

CRORES)

1 NO OF SPINDLES 25000 25000

2 PRODUCTION PER YEAR IN MT 4462.500 4462.500

3 SALES (REALISATION) 186.67 83.30 186.67 83.30

4 RAW MATERIAL COST (BASIC) 106.74 55.92 106.74 55.92

- . . . .

6 ELECTRICAL POWER COST 4.50 2.01 3.50 1.56

7 COMMISSION ON COTTON 0.60 0.31 0.60 0.31

8 CST ON COTTON @ 2% 2.13 1.11

9 VAT ON COTTON @ 5% 5.34 2.77

. . . .

11 COMMISSION ON YARN SALES 1.00 0.45 1.00 0.45

12 CST ON YARN @ 2% 3.73 1.67

13 VAT ON YARN @ 5% 9.33 4.17

14 INTEREST COST ON TERM LOAN @13% 13.83 6.17 13.83 6.17


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ECONOMIC ANALYSIS OF SPINNING UNITGUJARAT VS TAMILNADU

GUJARAT GOVT BENEFITSRs.

(PER KG)RS.

(CRORES)

1 INTEREST SUBSIDY @7% 7.44 3.32

2ELECTRICITY SUBSIDY @ 1.00 PERUNIT 0.62 0.28

3 VAT BENEFIT PER KG 5.34 2.38

4

BILL 0.06 0.03

5 CST ON YARN - (SAVING) 3.73 1.66TRANSPORTATION ON COTTON -

6 (SAVING) 2.70 1.40

7TRANSPORTATION ON YARN -(SAVING) 2.50 1.12

. .

TOTAL GUJARAT GOVT BENEFITS 21.40 9.75

CENTRAL GOVT BENEFITS Gujarat Tamilnadu

1

(SPINNING) 2.13 0.95 2.13 0.95

2INTEREST SUBSIDY @5% (SPG. +LINK) 5.32 2.37 5.32 2.37

TOTAL GOVT BENEFITS - SPINNING 23.53 10.69 2.13 0.95

TOTAL GOVT BENEFITS - SPINNING +LINKAGES 26.72 12.12 5.32 2.37


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CONCLUSION

TUFs scheme should also be extended to textile machinery manufacturers byan .

alone units to make them successful and more attractive.

Capital subsidy should be extended to textile units of Gujarat.


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TH NK YOUH NK YOU UU

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Vishal Chiripal - Spg.proj Final