The Hindu Business Line : TUFS made attractive with sops

CONCERNED over the laggard pace of progress in the Technology Upgradation Fund Scheme (TUFS) for the modernisation of textile industry in the country, particularly in the weaving segment where the offtake is less than one per cent only, some incentives have been added in recent months in order to draw more units to avail of the scheme.

Official sources told Business Line here up to end-September, 2003, 2,605 applications for loans amounting to Rs 10,137.11 crore (against a total project cost of Rs 17,929.29 crore) were received. Out of this Rs 6,656.08 crore have been sanctioned and Rs 4,856.78 crore disbursed.

In the powerloom sector, 258 applications for loan amounting to Rs 142.63 crore (against project cost of Rs 222.29 crore) were received. Of this, Rs 133.02 crore was sanctioned and Rs 64.44 crore disbursed.

The progress in the jute sector, up to the end of mid-August 2003, shows that eleven applications for loan amounting to Rs 37.48 crore (against project cost of Rs 64 crore were received. Of this, Rs 23.91 crore was sanctioned and Rs 20.21 crore disbursed.

In view of the overall inadequate performance of he TUFS, it has therefore been modified to make it more attractive to powerloom units by inclusion of a direct capital incentive at 20 per cent of the loan for installing new semi automatic/automatic/shuttleless looms up to a ceiling of Rs 1 crore. A facility for sourcing the loan from any financial institutions including non-banking companies recognised by the RBI has also been included. The period of implementation of the scheme has also been extended up to the end of the Tenth Plan i.e, March 31, 2007, the sources said.

Alongside, under the Cotton Technology Mission, 355 ginning and pressing factories were taken up for modernisation till end-September 2003, as compared to the target of 500 factories of which 190 have been modernised under mini-mission-IV. Besides, 58 market yards have also been completed under mini-mission-III.

The sources said that both on production and also in the export front, textile sector has not acquitted itself well during the first half of the 2003-04 fiscal. Available latest figures suggest that cotton yarn production recorded a fall of 6.12 per cent during the first half of the current fiscal at 1,028 million kg, against 1,095 million kg in the corresponding half of the previous fiscal. The decline in production was the highest in the handloom sector where it fell by 10.33 per cent at 2,675 million sq.mt, against 2,983 million sq.mt in the corresponding period of 2002. In hosiery cloth production the decline was by 1.30 per cent at 13,179 million sq.mt, against 13,353 million sq.mt in the corresponding half of 2002. The only redeeming feature was on the hosiery cloth production, which, however, saw an increase of close to 5 per cent at 4,045 mllion sq.mt.

The fall in production has an echoing effect on the textile exports too as such exports registered an overall decline of 10.55 per cent in value during April to August, 2003 at $ 4,616.84 million, against $5,161.59 million in the corresponding months of 2002. The sources said while the sector displaying positive performance include man-made textiles (12.93 per cent), silk (6.05 per cent) and jute goods (52.81 per cent), those showing decline during the period include handicrafts (27.38 per cent), coir and coir manufactures (21.49 per cent), readymade garments (14.31 per cent), wools and woollens (5.6 per cent) and cotton textiles (12.7 per cent) respectively.

However, imports of textiles revealed a substantial spurt of 20.20 per cent at $ 810.74 million during Apr-Aug 2003, against $650.85 million with the uptrend being recorded in import of raw material (31.50 per cent), readymade garments (82.52 per cent) and yarn and fabrics (42.02 per cent) respectively. But import of semi-raw material (2.54 per cent) and made-ups (9.75 per cent) declined during the period under review, the sources added.