The Hindu Business Line : TUFS may be restructured to focus on priority sectors

Coimbatore, Jan. 20 The Technology Upgradation Fund Scheme (TUFS) for the textile industry modernisation now in operation may see a new avatar beyond March when it is due for a relook/review by the Centre.

The Central Government may restructure the TUFS core elements by prioritising scheme's focus, according to Mr A.K. Singh, Secretary, Ministry of Textiles (MoT).

Talking to presspersons at the sidelines of the annual convocation at the Sardar Vallabhbhai Patel Institute of Textile Management here, Mr Singh said though his Ministry was serious about TUFS continuation, there is also a thinking in the Government that the scheme should be fine-tuned so as to make it more focused towards those sectors of textile industry that are in priority.

In this regard, the Government had to give due weightage in following procedures by considering the wish-lists of other agencies like the Planning Commission, he added.

Stating that the aspirations of other textile sectors such as processing, garmenting and technical textiles would have to be accommodated in the ambit of the TUFS, he said that it did not mean that the interests of the spinning sector would be ignored while extending the TUFS benefits.

Mr Singh's observation comes in the wake of the growing debate among various sectors of the textile industry on the continued operation of the TUFS whose tenure is set to expire by March 31, and amidst the speculation that the scheme would see major overhauling that may lead to dropping of some sectors totally from the scheme purview or alteration in the eligible rate of capital subsidy/concessional interest rate on the TUFS loans charged by the financial institutions.

Textile parks

The Centre, which has already cleared establishment of 26 textile parks, has also extended the total number of parks to be set up under the 10th Plan programme to 30 by adding four more park proposals and this has been decided at the recent Cabinet committee meeting, Mr Singh said adding that the Government would also try to establish another 50 more textile parks during the 11th Plan under the integrated textile park scheme.

The Government thinking behind creation of such parks is to enable the textile sector to have modern textile infrastructure as desired by the user industry which should also be involved in continued maintenance of these parks. Hence, the amalgam of two earlier schemes into one under the SITP which envisages Government bearing 40 per cent of the cost of park infrastructure building as grant/equity for the promoters.

Government hoped that the 30 textile parks cleared would be in place before 2008 and these parks would have a total financial grants of Rs 864 crore from the Centre and would have attracted a total investment of about Rs 13,500 crore.

As for the demand for removing the textiles committee cess, Mr Singh noted that the Centre had recently acceded the demand and removed the cess on the garment sector and it was seriously looking at the scope of removing the cess for other sectors too.

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