Business Daily from THE HINDU group of publications
Sunday, Jan 21, 2007
ePaper
Business Daily from THE HINDU group of publications Sunday, Jan 21, 2007 ePaper |
|
|
|
|
|
|
|
Industry & Economy
-
Textiles Textile Ministry favours continuation of TUFS G. Srinivasan
According to the officials, even if the recent approvals under the TUFS had to be discharged to the industry, it would entail an expenditure of Rs 5,000 crore over five years.
Senior Textile Ministry officials told Business Line that a presentation to the Planning Commission made early this week for their plan funds laid particular emphasis on continuing the TUFS well into the 11th Plan span as the scheme is scheduled to end on March 31, 2007. Their argument is that the textile industry has seen a spurt in production despite modest increase in capacities, primarily because of modernisation and growing productivity, driven by the TUFS. Official data show that Rs 31,590 crore has been sanctioned for investment by the industry on the basis of 4,248 applications received for various projects since inception of the scheme in February 1997. The Government has sanctioned Rs 1,440.15 crore as subsidy for these projects. According to the officials, even if the recent approvals under the TUFS had to be discharged to the industry, it would entail an expenditure of Rs 5,000 crore over five years. Also, it would be difficult to discontinue the scheme when its results during the eight-year tenure have been spectacular in terms of injecting productivity improvement through modernisation and upgradation of technology. They said to help the industry benefit through the scheme, "the emphasis would shift from weaving and spinning to processing and value addition in garmenting," so that more units could make use of the scheme and meet global competition. The sources said the processing industry has historically suffered lower investments because of stringent environmental norms. Which is why, effective from April 20, 2005, a credit-linked capital subsidy scheme at 10 per cent interest under TUFS over and above the extant five per cent interest reimbursement was brought into vogue.
Vision document
According to the latest vision document of the Confederation of Indian Textile Industry, investment of the order of Rs 51,000 crore is required in this segment as it is critical to step up exports of made-ups and apparel and reduce the reliance of the industry on imported fabric. Industry is of the view that it depends heavily on expensive imported machinery (over 70 per cent of demand) and hence, incentive under TUFS needs to be in place to offset the cost. This is also compounded by the fact that declining availability of second-hand machines is driving up investment needs for an equivalent capacity, thereby rendering it difficult for small entrepreneurs to scale up.
Fragmentation
In the face of fragmentation in the fabric, processing, garmenting and made-ups industry, there is a strong need to provide fillip to small entrepreneurs to scale up and integrate, they said. With the focus shifting to processing and high-value garmenting under the revamped TUFS, the $9.5-billion apparel export industry is hopeful that the scheme would not only be continued during the next Plan span, but also that the allocation of funds under the scheme would be increased to suitable level to meet the escalating demand of the industry.
More Stories on : Textiles | Modernisation
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | The Hindu ePaper | Business Line | Business Line ePaper | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2007, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|
