|Government assures textile industry of funds under TUFS|
|BS Reporter / Mumbai October 02, 2008, 0:44 IST|
Amid rising global financial uncertainties, the government has assured the textile industry that despite delays, the benefits under Technology Upgradation Fund Scheme (TUFS) will continue to be given. The domestic textile firms had raised concerns upon the delay in getting approved funds from the government. For nine months now, industry has not been getting the funds.
The industry is going to get the funds (under TUFS) for sure. The scheme is the main support from the government to the industry which has led to unprecedented amount of investment in the sector,” said Jagadip Narayan Singh, joint secretary, Ministry of Textiles.
Under TUFS, benefits include 5 per cent interest reimbursement on the normal interest charged by the lending agency and an upfront capital subsidy of 10 per cent for some specified processing machines. The scheme, which was for a period of five years from 1999 to 2004, has been extended to the Eleventh Five-Year Plan (2007-12). For the financial year 2008-09, Rs 1,090 crore has been approved as an allocation on account of interest support by the government.
However, the government said that there was slowdown in the industry as capacity utilisation had come down. “Due to aggregation of capacities over the last few years, capacity utilisation has come down a bit,” said Singh.
Giving a boost to technical textiles, which has a market size of Rs 30,000 crore in the country, Singh said the government is in the process of creating a knowledge base for technical texiles. “It’s a new vista and opportunities for growth in the sector are very high,” he added.
The government said that some of the textile firms have shown interest in setting up a textile park for technical textiles. “The government is closely looking for an integrated textile park solely dedicated to technical textiles,” said the joint secretary. Speaking to Business Standard, Singh said if such a park is set up, it would either be in Gujarat or Maharashtra. It would be first technical textile park in the country.
In the previous five-year plan, the government had approved 35 parks, while in the current plan so far 10 parks have been approved.