Big boost for textile sector: Govt approves special package for employment generation & promotion of exports
Govt plans to generate one crore jobs in the textile and apparel industry over next 3 years
Textile sector: Govt efforts to lead to a cumulative increase of US $ 30 billion in exports
Centre plans to invest ₹ 74,000 crores over next 3 years into textile sector
Govt's special package for textile sector a boon for women workforce on the country

The Union Cabinet under the Chairmanship of Prime Minister Shri Narendra Modi has given approval for a special package for employment generation and promotion of exports in Textile and Apparel sector.

The move comes in the backdrop of the package of reforms announced by the Government for generation of one crore jobs in the textile and apparel industry over next 3 years. The package includes a slew of measures which are labour friendly and would promote employment generation, economies of scale and boost exports. The steps will lead to a cumulative increase of US$ 30 bn. in exports and investment of Rs. 74,000 crores over next 3 years.

The majority of new jobs are likely to go to women since the garment industry employs nearly 70% women workforce. Thus, the package would help in social transformation through women empowerment.

Salient features of the package announced are: 

Employee Provident Fund Scheme Reforms


  • Govt. of India shall bear the entire 12% of the employers’ contribution of the Employers Provident Fund Scheme for new employees of garment industry for first 3 years who are earning less than Rs. 15,000 per month.
  • At present, 8.33% of employer’s contribution is already being provided by Government under Pradhan Mantri Rozgar Protsahan Yojana (PMRPY). Ministry of Textiles shall provide additional 3.67% of the employer’s contribution amounting to Rs. 1,170 crores over next 3 years.
  • EPF shall be made optional for employees earning less than Rs. 15,000 per month
  • This shall leave more money in the hands of the workers and also promote employment in the formal sector.


  1. Increasing overtime caps
  • Overtime hours for workers not to exceed 8 hours per week in line with ILO norms.
  • This shall lead to increased earnings for the workers


  1. Introduction of fixed term employment 
  • Looking to the seasonal nature of the industry, fixed term employment shall be introduced for the garment sector
  • A fixed term workman will be considered at par with permanent workman in terms of working hours, wages, allowanced and other statutory dues.


  1. Additional incentives under ATUFS
  • The package breaks new ground in moving from input to outcome based incentives by increasing subsidy under Amended-TUFS from 15% to 25% for the garment sector as a boost to employment generation.
  • A unique feature of the scheme will be to disburse the subsidy only after the expected jobs are created.


  1. Enhanced duty drawback coverage
  • In a first of its kind move, a new scheme will be introduced to refund the state levies which were not refunded so far.
  • This move is expected to cost the exchequer Rs 5500 crores but will greatly boost the competitiveness of Indian exports in foreign markets.
  • Drawback at All Industries Rate to be given for domestic duty paid inputs even when fabrics are imported under Advance Authorization Scheme


  1. Enhancing scope of Section 80JJAA of Income Tax Act
  • Looking at the seasonal nature of garment industry, the provision of 240 days under Section 80JJAA of Income Tax Act would be relaxed to 150 days for garment industry


PPT on Textile and Apparel Sector Reform Package :

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Changing Economic Scenario of India: From Fragile Five to Bright Spot
May 29, 2023

The State of Indian Economy has undergone a significant change in the last nine years. There was a time where the Indian Economy was termed as one of the Fragile Economies of the World. The inheritance of Indian coffers to the newly elected Prime Minister Narendra Modi and his government was not very sound. Indian Banks were evergreening the NPA and were sitting on a ticking bomb. There were scores of scams, and investor confidence was shaken. A policy paralysis resulting in lower growth and very high inflation rate was staring India. There was unnecessary liability of Rs.1.5 lakhs oil bonds on account of artificially lowering of fuel prices.

Year 2014 welcomed the PM Modi led government which came with the promise of ‘Ache Din’ and they were soon seen rolling out the carpet for ‘Ache Din’.

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Despite the recessionary winds in the west of today, India stands tall. It is being termed as a bright spot, with the economy with the highest projected growth is nearly 6 % in 2024 as per IMF. The country's vibrant domestic market, rising consumer spending, and increasing urbanization contribute to its sustained economic expansion. The Indian economy is one of the few economies of the world which has been a beacon of growth and potential.

The COVID- 19 had a very bad impact on the economies of the world. Many countries gave stimulus packages including India to revive the industry but putting a break was much necessary. Many thought that the stimulus break was not needed and just like western countries India should also continue. However, India treaded cautiously and used fiscal prudence which contained the inflation levels. The average inflation level was 4.8 % from 2014 – 2022. Even today despite supply pressures due to the Ukraine – Russia war, the Consumer inflation in India is at an 18 months low at 4.7% and Wholesale inflation rate is (0.92).

The macro economy was balanced and India on other hand saw aggressive infrastructure investment. Rudimentary changes like ease of doing mechanisms were introduced enabling a better economic atmosphere for foreign investments. India’s EOB ranking has improved from 142 in 2014 to 63 in 2022. As per the Business Environment Rankings (BER) report published by the Economist Intelligence Unit (EIU) in March 2023, India has successfully improved its BER ranking by four spots globally. India’s rank has improved from 14 for the period of 2018-22 to 10th rank for the period of 2023-27.

The Foreign investments in India has increased from the level of USD 36.05 billion in 2013-14 to USD 84.80 billion in 2021-22 indicating a jump of over 135% in 8 years.

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The Indian economy has emerged as an inspiration of growth and potential,driven by strong economic indicators, a favourable demographic dividend, FDI inflows, digital transformation, infrastructure development, and sectoral growth. As India continues its journey towards becoming a global economic powerhouse, sustained reforms, inclusive growth, and investments in human capital will continue to remain the priority of the Indian Government.