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G. Gurumurthy

Coimbatore , Nov. 16

THE Powerloom Development and Export Promotion Council has said the recent clearance by the Union Cabinet of the 20 per cent capital subsidy for modernisation of weaving machinery is a good move to expedite modernisation of the powerloom sector.

But limiting the investment on capital equipment that will be eligible for the subsidy at Rs 50 lakh would be inadequate, the council said.

The council Chairman, Mr M. Senthil Kumar, pointed out that the Centre has announced the 20 per cent capital subsidy scheme as a special package under the textile technology upgradation fund scheme (TUFS). But the minimum investment on any new textile weaving machine such as the rapier loom would cost around Rs 40 lakh per n the powerloom industry, most manufacturers prefer to install second-hand looms such as the P7100 model, whose per unit cost would vary from Rs 14.50 lakh to Rs 16.50 lakh. These producers would require to install a minimum of 6 to 8 machines at one go to have the minimum economic scale of operation.

This being the case, a manufacturing unit would need more than Rs 1 crore investment on loom modernisation and therefore the investment ceiling of Rs 50 lakh for availing itself of the 20 per cent subsidy would not meet the purpose. Mr Senthil Kumar suggested that the investment ceiling fixed should be appropriately increased to a level not less than Rs 1 crore.

Another hurdle in the path of achieving speedier modernisation of the weaving sector is the restriction on application of the capital subsidy scheme for investment made on used looms that are more than10-years-old, which would not be eligible for claiming the capital subsidy as in the case of the TUFS. If the Government wants to achieve wider scale modernisation in the weaving sector, a relaxation in the age of the used looms should be allowed as most weavers seeking investment on these looms prefer to go for looms older than 10 years for cost consideration.

Further, Mr Senthil Kumar said, in many instances, it was found that the second-hand looms, which are more than 10-years-old such as the PU/P7100 models, had proved worthy of investment in terms of performance and productivity.

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