Queries and Clarification

Clarification in respect of queries raised regarding the provisions under interest subsidy scheme and 10% capital subsidy scheme. Government of Maharashtra, Cooperation, Marketing & Textile Department, Government Circular No. Policy-2012/C.R.119/Tex-2 Mantralaya, Mumbai 400 032. Dated 23 April 2012. Read : 1) Government Resolution No. Policy-2012/C.R.1/Tex-2 dated 1st March 2012. 2) Government Resolution No. Policy-2012/C.R.2/Tex-2 dated 1st March 2012. 3) Government Corrigendum No.Policy-2012/C.R.1/Tex-2 dated 19th April 2012. 4) Government Corrigendum No.Policy-2012/C.R.2/Tex-2 dated 19th April 2012.

CIRCULAR The Government has sanctioned the scheme for interest subsidy on long term loans linked to the Centrally Sponsored TUFS Scheme and 10% Capital Subsidy to the new textile projects/ units set up in Vidarbha, Marathwada and North Maharashtra by the Government order under reference. With reference to the provisions under above Government Resolutions some queries are raised which seek further clarification from the Government. In respect of the queries received by the Government following clarification is being made. Sr. Queries raised frequently Clarification of the Government No. 1 Whose Prime Lending rate are we Prime Lending rate/Base rate of the referring to ? respective lending Agency or Bank as a) Is it a PLR of some specific applicable to the concern section of the Financial institution or industry or project. b) Respective company's lenders PLR ? 2 Simultaneously if the industry No apply for incentive offered by Maharashtra Government, under Mega Project, like stamp duty exemption, or VAT exemption or Electricity duty exemption for a specified amount will such amount be reduced from the total eligible amount of interest subsidy being offered under Maharashtra Govt. Textile policy ? 3 How would this be ensured that the In this particular case if interest subsidy Circular reg. queries Eng. 17April12.rtf

4

effective rate of interest payable by the company will be 0% or 2% ? PLR /Base Rate 10.75% Maximum Permissible Int. Rate12.5% Sanctioned Int.Rate @BR+300bps 13.75% In this particular case, permissible rate of interest would PLR (or Base rate) i.e. 10.75%. Given the interest subsidy@ 5% under centrally sponsored TUFS, the interest subsidy under this scheme would be 10.75%- 5% = 5.75%. Need clarification w.r.t. definition of Prime Lending Rate ?

5

Is there any impact if the same project is also eligible for capital subsidy under TUFS or any other industrial policy ?

6

What is the definition of "eligible textile units" ?

7

Does any private company eligible to fall under 0% rate of interest scheme and if yes, what are the eligibility criteria ?

Circular reg. queries Eng. 17April12.rtf

under the Industrial Policy of GOM is not available then the unit, mentioned in column 2 in Para 1(d) of the G.R. dated 1st March 2012 will avail interest subsidy at the rate of 5.75%. In case the unit mentioned falls in column 3 of Para 1(d) Then the applicable rate of interest subsidy will be 3.75%. But in this particular case if interest subsidy is available under the industrial policy of GOM then the same shall also be reduced (subtracted).

Prime Lending Rate/Base Rate as declare by lending agency from time to time. Any capital subsidy under TUF, if it is in lieu of interest subvention, than it shall be treated as given in Para 1(e) of Government Resolution No.Policy2012/C.R.1/Tex-2 dated 1st March 2012. Interest subvention under industrial policy shall be adjusted (as given in para 7 of said Government Resolution) for the purpose of calculating interest subsidy under Government Resolution No.Policy2012/C.R.1/ Tex-2 dated 1st March 2012. However any capital subsidy under State industrial policy shall not be considered for adjustment. "Eligible textile units" means any textile unit eligible as per Para 2 of the Government Resolution No. Policy2012/C.R.1/Tex-2 dated 1st March 2012 As per Para 1(d) of Government Resolution No.Policy-2012/C.R.1/ Tex2 dated 1st March 2012. in following cases private company can be eligible for an effective rate of 0%. (1) All eligible textile units located in Vidarbha, Marathwada, North Maharashtra, Konkan and D+Industrial area. (2)Garmenting unit in the entire State of Maharashtra. (3)New powerloom industries based on modern technology in the whole State

8

Is a single company with a knitting unit with in house Yarn Dyeing and fabric Dyeing & finishing unit eligible under scheme ?

9

Is there a requirement to have a separate knitting unit with processing unit ?

10

Under 2% rate of interest scheme, under point (6) what is the definition of "all other eligible private textiles units" ?

11

What will be the status of the scheme if TUFS is reinstated by the Government in 12th Five Year Plan ?

12

Is the Government of Maharashtra scheme for interest subsidy is being reviewed for the projects which have failed to meet March 31, 2012 deadline of centrally sponsored TUFS scheme ? For the calculation of interest subsidy, the interest subsidy available under TUFS and State Government's Industrial Policy will be excluded. Is there any other parameter taken into consideration while calculating the interest subsidy under th¤is scheme like capital subsidy, tax exemptions,

13

Circular reg. queries Eng. 17April12.rtf

of Maharashtra. (4)Modernisation of the powerloom in whole State of Maharashtra. (5)All types of silk projects in the entire State of Maharashtra. This will be subject to eligibility under Para 2 of Government Resolution No.Policy-2012/C.R.1/ Tex-2 dated 1st March 2012. Eligibility of any unit shall be as per Para 2 of Government Resolution No.Policy-2012/C.R.1/Tex-2 dated 1st March 2012. (for interest subventioin scheme)and Government Resolution No.Policy-2012/C.R.2/ Tex-2 dated 1st March 2012. (for capital subsidy scheme) Eligibility of unit shall be as per Para 2 of Government Resolution No.Policy2012/C.R.1/Tex-2 dated 1st March 2012. and Government Resolution No.Policy-2012/C.R.2/ Tex-2 dated 1st March 2012. Any private textile unit/project fulfilling criteria under Para 2 of referred 1 above but located in areas other than areas mentioned in column 2 of Sr.No.1 of Para 1(d) of referred 1 above. Referred Para 3(b) of Government Resolution No.Policy-2012/C.R.1/ Tex2 dated 1st March 2012 and Government Resolution No.Policy2012/C.R.2/Tex-2 dated 1st March 2012. No. But in case the GOI approves any project with retrospective effect that project will be eligible in the State Scheme.

Interest subvention shall be calculated under the State Scheme taking into account only interest subvention available from other sources eg. TUFS, industrial policy of the State etc.

14

15 16

stamp duty exemption etc. etc. ? Which District covered under As per Annexure - I of this circular. Vidarbha, Marathwada and North Maharashtra ? Which District covered under As per Annexure - II of this circular Konkan Division ? Which Talukas of rest of As per Annexure - III of this circular Maharashtra covered under D+ Industrial Zone? By order and in the name of the Governor of Maharashtra,

( R. M. Ade ) Under Secretary to Government. To All concerned.

Circular reg. queries Eng. 17April12.rtf

Government Circular No. Policy-2012/C.R.119/Tex-2 Dated 23 April 2012. ANNEXURE - I District covered under Vidarbha, Marathwada and North Maharashtra Vidarbha -

1) Buldhana 2) Akola 3) Washim 4) Amravati 5) Yavatmal 6) Wardha 7) Nagpur 8) Chandrapur 9) Bhandara 10) Gondia and 11) Gadchiroli.

Marathwada -

1)Aurangabad 2)Jalna 3)Beed 4)Osmanabad 6)Nanded 7)Parbhani and 8)Hingoli

North Maharashtra -

1)Nasik 2)Ahmednagar 3)Jalgaon 4)Dhule and 5)Nandurbar

5)Latur

------------------------------------------------------------------------------------------------------------ANNEXURE - II District covered under Konkan Division Konkan Division 4)Raigad 6)Ratnagiri

1)Mumbai 2)Mumbai Suburban 3)Thane 5)Sindhudurga and

------------------------------------------------------------------------------------------------------------ANNEXURE - III Talukas of rest of Maharashtra covered under D+ Industrial Zone Sr.No. 1 2

District Pune Solapur

3

Satara

Wai, Man, Patan, Jaoli

4

Sangli

Tasgaon, Kanapur, Atapadi, Jat, Kawathemahankal, Walva, Shirala, Kadegaon, Palus

5

Kolhapur

Circular reg. queries Eng. 17April12.rtf

Talukas Velhe Barshi, Akkalkot, Solapur South, Mohol, Mangalwedhe, Sangole, Karmala and Madha

Kagal, Changad,

Gadhinglaj, Ajara,

Bhudargad, Radhanagari, Bawda, Shahuwadi

Source:-Government Resolution No.PSI-1707/(CR-50)/Ind-8, dated 30th March 2007 Industries, Energy & Labour Department, Mantralaya, Mumbai-400 032

Circular reg. queries Eng. 17April12.rtf

Circular reg. queries Eng. 17April12.rtf

Circular reg. queries Eng. 17April12.rtf