The Hindu Business Line : TUFS data shows capacity building in textile industry

An impact analysis on the working of the Technology Upgradation Funds Scheme (TUFS) from its launch in1999 till end-August 2006 shows that the scheme has done reasonably well in terms of capacity building of the domestic textile manufacturing industry.

The analysis prepared by the office of the Textile Commissioner has figured that as against the incremental spindles of 13.78 million achieved during the past ten years, the spindle rise between 1999 and 2006 alone is 9.79 million. The TUFS period gave rise to 3.3 lakh rotors (as against the incremental rotors in the past ten years of 5.4 lakh) and 32,000 shuttleless looms. The spun yarn production rose by 7 per cent and fabric production 9-10 per cent.

Export rose by 22 per cent last year while in the current year it has risen by 24 per cent. With India's spinning sector attaining global competitiveness, its average cotton yarn spinning cost today works out to $2.45 per kg which, according to the impact analysis, is found to be lower than even China's.

Investment profile

A run through the TUFS investment profile between 1999 and end-August 2006 reveals that the total estimated investment attracted by the domestic textile industry stood at Rs 74,642 crore.

Of this, the project costs sanctioned under TUFS works out to Rs 46,702 crore. Further, the bulk of the TUFS investment of Rs 46,702 crore appears to have occurred after January 2005 when the globalised textile trade came into vogue with the abolition of the quota regime.

While a sum of Rs 21,105 crore TUFS investment was made between 1999 and end-December 2004, the period between January 2005 and end-August 2006 has seen a higher quantum of investment of Rs 25,597 crore under the TUFS route.

Availment of TUFS

Presenting the impact analysis on the TUFS at a meeting of textile entrepreneurs here recently, the Joint Textile Commissioner, Ms Sashi Singh, noted that Tamil Nadu continued to dominate in the utilisation of TUFS with the total projects sanctioned working out to Rs 9,905 crore. Gujarat and Punjab occupy the next best positions in that order at Rs 8,275 crore and Rs 7,613 crore respectively.

The spinning sector and composite textile mills have taken a lion's share in the allocations at Rs 13,490 crore and Rs 11,098 crore respectively. Based on the impact analysis, the Textile Commissioner's Office has now proposed its 11th Plan investment document.

To enable the domestic textile industry attain the projected market size of $115 billion by 2012, the document has outlined a Rs 1,50,600-crore investment plan which sets out a spinning capacity of 29.25 million spindles including 8.25 million spindles replacement (costing Rs 50,200 crore), an incremental 1.08 lakh shuttleless looms (Rs 20,200 crore), processing sector for capacity of 48 billion sq mtrs of cloth (Rs 56,000 crore), 9,400 knitting machines (Rs 2,400 crore) and 14.5 lakh machines for garmenting (Rs 21,800 crore) .

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