Mumbai, Feb 18 (TNN): In a bid to script a turnaround of cooperative spinning mills and powerloom societies, the state government has decided to allow them to go in for privatisation.

A new state textile department policy allows them to change land use, which means they can use it for reasons other than industrial purpose.

After the policy was cleared by the state cabinet 10 days ago, the department issued a government resolution (GR) on Saturday. According to the new policy, cooperative spinning mills and powerloom societies will be allowed to be privatised provided they are ready to return the government equity, loan and interest thereupon. Besides this, a charge has to be paid to the government for change in land use under the ‘one-time exit policy’. The new policy will be in force till 2023. 

There are 136 societies and mills across the state that had sought funds in the form of share capital, out of which 66 are running, while some others are ‘under installation’, which means the production is yet to begin. A few have opted for liquidation and three have shut down. 

The state government’s textile department funds cooperative cotton mills to the extent of 45% of share capital, while they are required to raise 50% from the open market and the remaining 5% is to be borne by the mill board. In case of mills run by scheduled caste (SC) members, the state textile department will provide 45% of share capital, while 50% will be funded by the social justice department and the remaining 5% will be raised by the mill board.

“Loss-making powerloom societies or cooperative mills under liquidation had no options for revival. Now, they will have an option by changing land use,” said Atul Patne, secretary, textile department. 

The policy is aimed at generating 10 lakh new jobs in the next five years and doubling farmers’ income by 2022. It is also expected to attract investments worth Rs 36,000 crore. The government claims the policy will provide many benefits, including competitive power tariff and increased capital subsidy for SC/ST and minority categories. The policy lays special focus on strengthening the knitting, garmenting and hosiery sector which will create ample employment opportunities for women.

The government said this will prove to be an important step toward creating women entrepreneurs.