Govt extends garment sector benefits to made-up units

By: | Updated: December 7, 2016 10:54 PM

The Cabinet on Wednesday extended certain incentives, announced earlier this year for the garment industry, to the labour-intensive made-up sector as well.

 Prime Minister Narendra Modi present in the Lok Sabha in New Delhi on Wednesday. (PTI)Prime Minister Narendra Modi present in the Lok Sabha in New Delhi on Wednesday. (PTI)

The Cabinet on Wednesday extended certain incentives, announced earlier this year for the garment industry, to the labour-intensive made-up sector as well. The incentives will be provided through the budget of Rs 6,006 crore already approved for the apparel sector “with the objective of creating large scale direct and indirect employment of up to 11 lakh persons over the next three years in the made-ups sector”, an official statement said.

However, while the government had also announced a radical labour reform by allowing fixed-term employment in the garments sector, keeping in view the highly seasonal nature of order flows, this hasn’t been made applicable to the made-ups sector yet.

Nevertheless, other key incentives will be extended to the made-up sector as well. According to the latest Cabinet decision, contribution to the EPF will be made optional for employees earning less than Rs 15,000 per month in the made-up sector.

Permissible overtime limit will be roughly doubled to 100 hours per quarter in made-ups manufacturing sector.

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The Pradhan Mantri Paridhan Rozgar Protsahan Yojana (PMPRPY) scheme (for apparel) will be extended to the made-ups sector for providing an additional 3.67% share of employer’s contribution in addition to 8.33% already covered under Pradhan Mantri Rozgar Protsahan Yojana (PMRPY) for all new employees enrolling in EPFO for the first three years of their employment.

Even the rebate of state levies under the duty drawback scheme will be provided on exports of made-ups, in line with that for garments.

While announcing the package for the garment sector, the government had said it will create an additional one crore jobs over three years apart from raising exports by $30 billion and attracting investments worth Rs 74,000 crore during this period.

As per the latest decision, the government will provide production incentive through the enhanced Technology Upgradation Fund Scheme. so subsidy of additional 10% for the made-up sector will be made available. This will be similar to what is being provided to the garments sector.

 

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