Cabinet clears Rs 6,000crore package for Textile Sector

The government has announced a Rs6,000-crore package for the textiles and apparels sector to help it wrest a bigger share of the global market. The package also provides the sector more flexible labour laws and financial incentives. It hopes the package will create one crore new jobs in three years, attract Rs74,000 crore in investment and generate $30 billion in exports earnings.

India’s textiles and apparel exports add up to about $40 billion. India has not been able to take advantage of rising wages in China to get a bigger share of the exports market despite having abundant labour and entire value chain of fibre to fabric.

LABOUR FLEXIBILITY The government will foot the entire 12% of employer’s contribution under the Employers Provident Fund Scheme for new hands hired by the industry and earning less than Rs15,000 a month for the first three years. This is higher than the 8.33% share borne by the government under the Pradhan Mantri Rozgar Protsahan Yojana (PMRPY). This will add up to a benefit of Rs1,170 crore over the next three years for the industry

In addition, provident fund contribution will be made optional for those earning less than Rs15,000 per month, which will boost in hand salaries of sector workers and thereby lift its employment attractiveness. Overtime hours for workers will be fixed at eight hours per week in line with the ILO norms, which will further increase hiring