Union Cabinet approved Rs 6,000 crore special package for textiles & apparel and 10,000 crore Fund to encourage start-up’s in the country. The decision was taken at a meeting of the Union Cabinet chaired by Prime Minister Narendra Modi.
Government believes that the textile sector has the capacity to create one crore new jobs in 3 years by attracting USD 11 billion investment and generating USD 30 billion in exports.
“The package will help in realising the true potential of employment generation in the textile and apparel sector,” said Finance Minister Arun Jaitley.
Over the last few years, apparel manufacturing has shifted to countries like China because of cost advantages. However, China’s cost advantage has been neutralised to some extent because of increase in labour wages.
The Cabinet has also approved the establishment of “Fund of Funds for Startups” (FFS) at Small Industries Development Bank of India (SIDBI) for contribution to extend funding support to Start-up’s.
The corpus of Rs.10, 000 crore will be built up over the 14th and 15th Finance Commission cycles subject to progress of the scheme and availability of funds.
Government has already provided Rs 500 crore to the corpus of FFS in 2015-16 and Rs.600 crore earmarked in the 2016-17. The Fund is expected to generate employment for 18 lakh persons on full deployment.
Industry bodies welcomed the initiatives, including labour reforms, saying that the sector has huge potential for job creation. Some said however that support for R&D was missing.