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South leads in number of new textile mills set up in last 4 years
Dec '08
Rising cost of input, stiff competitive global market and higher borrowing cost are the major threats faced by the textile industry. Government have been taking continuing measures to promote textile industry and export segment.

Among the major steps Government has of late made the following changes: -
* General reduction of 4% in CENVAT rates. As a result, the textile machinery will have CENVAT of 10% and Non-cotton textile will have 4% CENVAT vide Notification No.58/2008-CE dtd. 07.12.2008

* Rate of duty on cotton textile and the textile articles has been reduced from 4% to Nil vide Notification No. 58/2008-CE dtd. 07.12.2008

* NAPHTA imported for generation of electric energy has been exempted from import duty vide Notification No. 128/2008-Cus dtd. 07.12.2008.

* The benefit of Service Tax refund is now extended to service provided by a clearing & forwarding agent to exporters vide Notification No. 33/2008-ST dtd. 07.12.2008.

* The Threshold limit of refund of service tax paid by exporters on foreign commission agent service has been enhanced from 2% of FOB value to 10% of FOB value of exports vide Notification No. 33/2008-ST dtd. 07.12.2008.

* Draw back benefit can now be availed of simultaneously with refund of service tax pad in respect of exports.

* Pre and post – shipment export credit for certain specific sectors including textiles is being made more attractive by providing an interest subvention of 2% upto 31/03/2009 subject to minimum rate of interest 7% per annum.

* An additional allocation of Rs. 1400 crore will be made to clear the entire backlog in TUF Scheme.

* All items of handicrafts will be included under 'Vishesh Krishi & Gram Udyog Yojana.

* To boost collateral free lending, the current guarantee cover under Credit Guarantee Scheme for Micro and Small enterprises on loans will be extended from Rs.50 lakh to Rs.1 crore with guarantee cover of 50 percent.

As per the reports received from Regional office of the Textile Commissioner, Coimbatore no shifting of textile mills from other parts of the country is reported.

As per record of this office during the period 2004-05 to December 2008 (upto 15th December 2008), new 365 textile mills from the southern region i.e., Andhra Pradesh, Karnataka, Kerala, Tamil Nadu and Pondicherry were enlisted as against this only 23 textile mills from the Northern Region, i.e., Delhi, Haryana, Rajasthan, Uttar Pradesh and Uttaranchal were enlisted during the corresponding period.

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