The Hindu Business Line : TUFS for engineering industry mooted

A SUGGESTION to the Central Government to formulate a technology upgradation fund scheme (TUFS) for the engineering industry on the lines of a similar one for the textile industry has been made by the Engineering Export Promotion Council Chairman, Mr Satish K. Dhanda.

He is also hopeful that once the labour and financial regulations are modified, India would see a substantial spurt in Foreign Direct Investment (FDI) in industries.

Speaking to presspersons on Wednesday on the sidelines of Euro India business meet organised by EEPC in association with the Coimbatore District Small Industries Association (Codissia), he said the engineering industry in the country recorded an 18 per cent growth in exports last year reaching a figure of nearly $7.8 billion and this year, it is hopeful of achieving an export volume of $9 billion.

While the US topped the export market, Europe and the UAE were the other two major regions catered to by the Indian engineering industry.

Mr Dhanda said the council has persuaded the Centre to permit the import of capital goods almost at zero duty. Earlier the duty was very high on such imports.

He said the EEPC also plays a significant role in curbing the rise in prices of steel by prevailing upon the Centre to modify the duty structure so that the end products were not loaded with taxes.

The council wants the Government to start a programme for the engineering industry, on the lines of TUFS for the textile sector, so that adequate finance is available for it to modernise at competitive rates.

Mr C.S. Shukla, Executive Director, EEPC, New Delhi, who was also present, said the Government has already announced a scheme — Market Access Initiative (MAI) — with a corpus of Rs 150 crore, which would be replenished once it is exhausted. The scheme covers various activities such as R&D, establishing warehouses and showrooms, which would help the exporters.

The EEPC Chairman felt that the Centre should make available cheaper credit for import of capital goods in dollar denominated loans at LIBOR plus 0.75 per cent so that the requirements for capital goods were met at international or even cheaper rates.

He felt that it was also time that the State governments emulated the example of the Centre in initiating infrastructure development works by providing power at reasonable rates.

Mr Shukla said earlier the European OEMs were looking for semi-finished components from India. But because of the technological development witnessed by India, they are opting to buy finished products from India.

When companies invest their own money in a country they also supply latest technology and assist in marketing, as has been shown in China and India is better placed than China in certain respects like well placed system of law, multiple social welfare schemes etc., Mr Dhanda said.

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