The Hindu Business Line : Economic size norm for small spinning units may go

Coimbatore, Aug. 27 The problem of getting past the minimum economic size (MES) stipulation for the small-scale spinning mills in regard to technology upgradation fund scheme (TUFS) projects may end soon.

The Ministry of Textiles is favourably disposed towards the small spinning mills’ long pending plea to do away with the eligibility criterion of minimum 8,000 spindles capacity for units seeking TUFS funds, according to Mr Kuppusamy, President of the South India Small Spinners Association (Sisspa).

Addressing members of Sisspa at the 16th annual general meeting of the association held here, he said an order to this effect from the Ministry is expected soon. The Government in its viability criteria has set minimum economically viable size at 8,000 spindles and extension of any financial assistance for modernisation has, therefore, been linked to the MES compliance.

Mr Kuppusamyhoped the Government’s formal announcement would come during the textile summit to be held this month-end in Delhi.

A Sisspa delegation led by its office-bearers recently met top officials of the Union Ministries of Finance, Commerce and Small Industries besides the Textile Ministry officials to explain the difficulties being experienced by the small spinners in the matter of securing the TUFS assistance and also the high interest on their bank borrowings which have affected their modernisation projects.

One more development may be the granting of the continuation of the five per cent interest subsidy under the modified TUFS exclusively for the small and medium textile spinners, the Sisspa said.

The Sisspa AGM deliberated on other issues such as the removal of 10 per cent duty on cotton imports, market committee cess levied by the Tamil Nadu Government on waste-cotton and early refund of the outstanding 5 per cent TUFS subsidy for the mills from the Centre.

The meeting had cautioned the Government about deciding on export allocation of new cotton crop based on suggestive crop estimation and without accessing the needs of the domestic textile industry as the outgo of quality raw cotton at the beginning of a new cotton season would only unduly harm the country’s rivals in textile trade, notably China.

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