Odisha Cabinet approves Rs 200 crore liability settlement for defunct textile units

Bhubaneswar: The Odisha Cabinet chaired by Chief Minister Mohan Charan Majhi on Friday approved a budgetary provision of Rs 200 crore as the first phase of liability settlement for closed cooperative spinning mills, powerloom units and a sizing unit under the Handlooms, Textiles and Handicrafts department.

The decision will facilitate transfer of valuable land to the Odisha Industrial Infrastructure Development Corporation (IDCO) and pave the way for establishment of new employment-intensive industries, particularly in the textile and apparel sectors, said Chief Secretary Anu Garg in a post-cabinet briefing.

The defunct units, operating under the Odisha State Co-operative Spinning Mills Federation Ltd (SPINFED) and registered under the Odisha Co-operative Societies Act, 1962, had ceased operations over the years due to financial distress, obsolete machinery and other operational challenges. As their revival was found to be economically unviable, the government had earlier decided to liquidate the units and utilise their assets for fresh industrial development, she said.

To oversee the process, the government constituted an empowered committee to manage liability settlement, asset transfer and land utilisation. Following a detailed reconciliation exercise, the committee assessed the total statutory and non-statutory liabilities of the closed spinning mills, powerloom units and one sizing unit at Rs 361.67 crore. The assets include around 261.2 acre of land.

Garg said the Rs 200-crore budgetary provision will be used for one-time settlement (OTS) of dues with creditors and financial institutions. The settlement is expected to remove legal and financial encumbrances on the properties, enabling their transfer to IDCO for industrial use.

The move will unlock land resources currently tied up in non-functional units and help attract investment in labour-intensive sectors. The government expects the initiative to strengthen industrial infrastructure, boost the textile and apparel ecosystem and generate substantial employment opportunities across the state, she said.