The Union Cabinet on Wednesday cleared seven key decisions, from a special package for the textile sector to a mega spectrum auction and a fund for start-ups, a move that aims at creating more jobs and attracting investments in the country.
Focusing on the textile and apparel sector, which has been ailing for a long time, the Government approved a Rs6,000-crore special package that would create over one crore new jobs in three years and attract investments of $11 billion while eyeing an $30.4 billion increase in exports.
The Government also approved an Rs5.66-lakh crore mega spectrum auction plan and a Rs10,000-crore fund for start-ups. The decision was taken at a meeting of the Union Cabinet chaired by Prime Minister Narendra Modi.
Talking about the textile sector, Finance Minister Arun Jaitley told reporters, “Over the last few years, apparel manufacturing had shifted to countries like China which had cost advantages. However, China’s cost advantage has been neutralised to some extent because of increase in labour wages. We have advantages of economies of scale. Therefore, we decided to boost the sector. The package will help in realising the true potential of employment generation in the textile and apparel sector.”
“We will overtake Vietnam and Bangladesh in garment exports within the next three years if we properly implement the package,” Textiles Secretary Rashmi Verma said.
A unique feature of the scheme is that disbursal of subsidy will only take place after the expected number of jobs are created. The majority of new jobs are likely to go to women since the garment industry employs nearly 70 per cent women. Thus, the package would help in social transformation through women empowerment.
Where the spectrum plan is concerned, the Government said it would be the biggest auction of mobile phone radio waves in the country and would fetch about Rs 5.66-lakh crore.
The auction will help operators augment expansion of high-speed 4G voice and data services in the world’s second-largest mobile phone market after China.
“This may be the largest-ever auction in history of the country. It has been approved,” Jaitley said, but did not give a timeline for the auction.
Spectrum will be sold in the following bands: 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz and 2,500 MHz. “The Government will refer back to Telecom Regulatory Authority of India (TRAI) the issue of Spectrum Usage Charge (SUC) paid by operators,” Jaitley added.
The TRAI had proposed 3 per cent of the annual revenue of operators as SUC, a recommendation the Telecom Commission also backed. However, the Government’s chief law officer Mukul Rohatgi opined against hiking SUC for Broadband Wireless Access (BWA) providers such as Mukesh Ambani’s Reliance Jio Infocomm from the current 1 per cent.
Jaitley, however, said TRAI’s opinion will be taken again as Mukul Rohatgi’s opinion came later. Sources close to the development said TRAI is likely to give its recommendation in one month.
Of the Rs 5.66-lakh crore expected from the auction, the Government would get Rs 64,000 crore this fiscal from upfront payment as part of a staggered payment schedule. Overall, Rs 98,995 crore would come from various levies and services in the telecom sector in the current fiscal, including the upfront payment.
For startups also, the Government extended funding support with a package of Rs 10,000- crore.
“The Union Cabinet has approved the establishment of Fund of Funds for Startups at Small Industries Development Bank of India for contribution to various Alternative Investment Funds, registered with Securities and Exchange Board of India, which would extend funding support to the companies,” a statement said.
The corpus would be built up over the 14th and 15th Finance Commission cycles, subject to progress of the scheme and availability of funds. The Government provided Rs 500- crore to the corpus in 2015-16 and Rs 600 crore was earmarked in 2016-17.