The Maharashtra government has set up a committee headed by additional chief secretary (textiles) to facilitate the shifting of the eight defunct mills of National Textile Corporation (NTC) and those that are in the process of being shut down. NTC has bought 40 acres in Vidarbha where it plans to set up four mills in lieu of the four it is planning to shut down in Mumbai. Of the 25 mills it owns in Mumbai, eight have already been shut down.

As per sources, the state government is considering an increase in the capital subsidy being provided to those units, which are being set up in cotton-growing areas of the state under the two-year old textile policy to give the industry a boost. Currently, the state government offers 10 per cent capital subsidy and 5-7 per cent interest subsidy to those setting up textile units in the cotton-growing areas. The interest subsidy is for all units even those that are set up in Satara, Solapur, Ichalkaranji, which do not produce cotton. The increase in capital subsidy may become a sore point in these parts of the state. Under the state's textile policy, 738 units have been sanctioned. Of these 246 units are already operational and provide employment to 10,800 people.

In a meeting with NTC officials a fortnight ago, Chief Minister Devendra Fadnavis made it clear that the government would help NTC shut its mills in Mumbai and develop the land, provided it set up textile units in Amravati. The condition is to set up the mills there, operationalize them and only then would the government allow NTC to commercially exploit its land in Mumbai, said a source.

Jalgaon is the largest producer of cotton in Maharashtra followed by Yavatmal in Vidarbha. Of the 80 lakh bales that are produced annually, 10 per cent is from Jalgaon (north Maharashtra). The decision may be opposed by political satraps in Satara, Sangli, Solapur and Ichalkaranji who have interests in the textile industry in these regions.