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Government’s package for textiles sector yet to take off

The special package India has offered the textile sector hasn’t found too many takers. The software is such that even a slight incompatibility between the credentials of the employee, as provided by the employer, and the employee’s Aadhaar card details would mean rejection. The package for the sector included making EPF optional for employees earning less than Rs 15,000 per month. The idea was to ensure there is more cash in the hands of such workers. However, the proposal needs an amendment to the EPF Act, which has yet to be done.

Trade unions are not happy with the proposal as they feel it would deprive workers of even a modicum of social security. The scheme’s objective was to achieve a cumulative increase of $30 billion in textile and garments exports and investments of Rs 74,000 crores in the sector over three years.

The package includes introduction of fixed-term employment, in line with the seasonal nature of the industry, additional interest subsidy incentives under the technology upgradation fund scheme and an enhanced duty drawback coverage for exports. Policy makers want to extend these provisions to other employment-intensive sectors like leather and footwear.