G. Gurumurthy

Coimbatore, Sept. 15

THE Tamil Nadu Spinning Mills Association (TASMA) has asked the Centre to enlarge the corpus of the Technology Upgradation Fund Scheme (TUFS) to meet the rising demand for the textile modernisation fund.

The existing TUFS corpus of Rs 25,000 crore, set up by the Textiles Ministry for the period between 1999 (when TUFS was launched) and 2004, would not be sufficient, as the current pace and scale of investments being planned in the industry are likely to push up fund needs beyond this amount.TASMA has stated that the hike in the TUFS corpus is needed considering that the scheme's tenure originally to end by March 31, 2004, was extended by two years and it will now last till March 31, 2007, on the demand of the industry.

The country's textile export share is expected to go up from the present 4 per cent to 8 per cent by 2010. To achieve a higher level of output, the textile industry's capacity expansion/modernisation drive would increase, the TASMA said.

The Dindigul-based textile industry body also wanted the Centre to simultaneously extend the TUFS tenure by another three years to make it terminus with the year 2010. The time extension is needed because the capacity expansion/modernisation projects of most mills are hampered by difficulties in getting machineries delivered on time. These mills do not know, says TASMA, whether they would be able to complete the modernisation projects within the extended tenure fixed for the TUFS, i.e, before end-March 2007. Hence, TASMA had requested the Centre to simultaneously extend the tenure of the TUFS up to 2010.

The TASMA officials say that with encouraging market sentiment, almost all the textile mills with sound financial background have taken up capacity building and their production capacity is expected to grow by 30 per cent within the next one year.

(This article was published in the Business Line print edition dated September 16, 2005)
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