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July 3, 2023

How To Get Textile Capital Subsidy from Maharashtra Govt and Get back your Capital Investment in 2 years

by Admin in Income Tax

How To Get Textile Capital Subsidy from Maharashtra Govt and Get back your Capital Investment in 2 years

Integrated and Sustainable Textile Policy 2023-2028-MAHARASHTRA

Textile Industry plays an important role in the national economy owing to its major contribution to GDP, industrial production, employment, and exports. The country is the world’s second-largest producer of textiles and garments and the fifth-largest exporter of textiles spanning apparel, home and technical products.

Maharashtra comprises a significant chapter in the remarkable growth story of India as a textile’s powerhouse. The State accounts for 10.4% of the country’s total textile and apparel production and 10.2% of the total employment in this sector.

The textile industry in Maharashtra needs to evolve and capture new and emerging opportunities in this rapidly changing global business environment and hence the State has come up with the NEW TEXTILE POLICY for a period of 5 years from 2023-2028 to boost the TEXTILE INDUSTRY.

Vision of the Integrated and Sustainable Textile Policy 2023-2028 – Maharashtra

It’s in line with the 5F vision of the Government of India- Farm to Fiber to Factory to Fashion to Foreign. The policy envisions integrating the whole textile value chain and creates an enabling environment for sustained growth of all sub-sectors in the industry.

The State of Maharashtra has been broadly divided into 4 zones based upon the development of textile sector and availability of inputs for the textile industry.

1) Zone 1 (Vidarbha includes Nagpur and Amravati Divisions)

2) Zone 2 (Marathwada includes Aurangabad Division including Dhule and Jalgaon


3) Zone 3 (North Maharashtra includes Nashik Division excluding Dhule and Jalgaon


4) Zone 4 (Western Maharashtra & Konkan includes Pune and Konkan Divisions)


There are two types of incentive available to the Textile Sector

  1. Capital Incentive on Machinery
  2. Electric Subsidy on the units consumed

Following Sectors are eligible For Textile Subsidy

  1. Ginning and Pressing Sector
  2. Spinning Sector
  3. Powerloom Sector
  4. Handloom Sector
  5. Processing Sector
  6. Knitting, Hosiery, Garmenting Sector
  7. Sericulture
  8. Traditional Textiles
  9. Wool Sector
  10. Non-Conventional Yarn/Fiber and Synthetic Yarn / Fiber
  11. Technical Textile

All new Units as well as the units in expansion are eligible for the subsidy provided they satisfy the required criteria.

However the total amount of subsidy to any unit/enterprise will not exceed 100% of Fixed capital investment including incentives from Central Govt. and other departments of the State Govt.

Incentive is provided on the cost of Machinery installed in the Textile unit and it will vary as per the sector and areas wise classification of the unit. In general the subsidy for units is detailed below-:

1. Capital and Electricity subsidy:

Table 1

S No.Size/ ZoneFinancial Assistance in form of Capital Subsidy -% (On fixed Capital Investment)Electricity Subsidy
1Zone 145%As per Annexure A  
2Zone 240%
3Zone 335%
4Zone 430%
Large Enterprises
1Zone 140%As per Annexure A
2Zone 235%
3Zone 330%
4Zone 425%
Mega Enterprises
1Zone 155% with a maximum upto INR 250 crore, whichever is lessAs per Annexure A
2Zone 250% with a maximum upto INR 225 crore, whichever is less
3Zone 345% with a maximum upto INR 200 crore, whichever is less
4Zone 440% with a maximum upto INR 175 crore, whichever is less 
Ultra Mega EnterprisesHigh power Committee(HPC) under Chief Security will be constituted to approve the special package of Incentives to Ultra Mega ProjectsFor Ultra Mega Projects the investment will have to be made within a period of 10 years from the date of issue of letter of intent from the departmentAs per Annexure A
Please  NoteAdditional Capital Subsidy of 5% for SC/ST/Minority/Ex servicemen unitsAdditional Subsidy of 5% will be eligible for units being run by women( provided that more than 50% of the employees working are women In case the number of women employees exceed 50, it will be mandatory for the units to have an availability of crèche facility to qualify for the additional subsidy

i. In the case of e ectricity subsidy for existing units, subsidy will be provided as per the rates given in Annexure A for a period of 2 years only.

ii. Post the set period of 2 years, no electricity subsidy will be provided. However, the subsidy amount of 12 months will be calculated and provided as capital subsidy for establishment of solar power plant.

iii. The guiding principles for the solar project for the existing units will be as follows-

The DPR for solar plant shall be weighed and approved by Maharashtra Energy Development Agency (MEDA) or my other such agency decided by the Govt. from time to time.

The capital subsidy (electricity subsidy for 12 months/ cost of the power plant up to maximum of 4MW/ capping of INR 4.8 crore, whichever is less) will be provided in 2 equal instalments (with a gap of six months between the instalments) post the operationalization of solar power plant

There will be a cap of INR 40 lath per unit per month on the disbursement of monthly electricity subsidy.

Electricity Subsidy Rate for Textile Units

LTCategoryTextile Subsidy (Rs. /Unit)
LT PowerloomRs./Unit
0-20 kW3.77
Above 20kW3.40
LT Knitting, Hoseiry and GarmentsRs./Unit
0-20 kW3.77
Above 20kW3.40
LT Co-op Soot GirniRs./Unit
0-20 kW3.00
Above 20kW3.00
LT Non Co- op Soot GirniRs./Unit
0-20 kW2.00
Above 20kW2.00
LT Process industry and all other Textiles Units (Having Load above 107 HP)Rs./Unit
b)Above 107 HP2.00
HTHT Powerloon, Non Co-op Soot Girni , Knitting ,Hoseiry and Garments , Process Industry and all other Textile UnitsRs./Unit
66kW and Above2.00
Ht Co-op Soot GirniRs./Unit
66kW and Above3.00

Maharashtra State Textiles Development Corporation (MSTDC)

Maharashtra State Textiles Development Corporation (MSTDC) will be established as a statutory corporation on the lines of MIDC. All the existing corporations will be merged into MSTDC. All the assets of the present corporations will be transferred to MSTDC and all liabilities will be restructured as per Government directives. The Department will establish this Corporation within a period of one year from the release of the policy.


  1. Udyam Registration
  2. Term Loan Bank Sanction Letter
  3. Electricity Bills
  4. Banks Inspection Letter
  5. Term loan active status
  6. Land Documents
  7. GST Certificate
  8. Purchase Sale bills
  9. Capacity utilization greater than 70%

If you need any further help for subsidy application in Maharastra or any you can connect to the Author

The author of this article is CA KUNAL BUDHRAJA.

Email : cakunal@bcafirm.in

Phone Number : 9920701007

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