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Textiles: twin gifts to boost processing sector

By M. Gunasekaran

TIRUPUR, FEB. 1. There are two good news to the textiles processing sector to cheer about which is crying for modernisation in a "fast track" mode.

The interest incentive has been increased to 8 per cent from 5 per cent under the Textiles Upgradation Fund Scheme (TUFS). And the interest rate for loans under the SIDBI-KfW scheme for cleaner production measures has been reduced to 8.5 per cent from 9.5 per cent a fortnight ago with the option of availing interest incentive of TUFS.

The Union Textiles Minister, Shankersinh Vaghela, has announced the increase of interest subsidy recently and notification in this regard is expected. "The twin benefits will be a boon to the processing industry. Once the notification comes into force, real interest rate will be 0.5 per cent only, says K. I. Mani, Deputy General Manager, Small Industries Development Bank of India (SIDBI).

"Wet processing is the weakest component in the chain. Very few people in this region are using Soft Flow machines, which consume less water and discharge less effluents. In addition, the quality of finishing is high in this eco-friendly system. But majority of the dyers, more than 1,000 units, use Winch machines, wherein the wastage of water is high. They need to convert the technology but many are hesitant because it needs huge investment, Mr. Mani added.

The KfW, a German-based multilateral funding agency, earmarked Rs. 82 crores for this scheme. The minimum loan amount for assistance under the scheme would be Rs. 10 lakhs and the small and medium sector could avail itself of that.

Though the scheme came into existence a year ago, not many people availed of this. Reason: high rate of interest and bar on industry to avail of interest subsidy (5 per cent) under the TUF scheme. Now the conditions were relaxed.

Only 20 major units have installed reverse osmosis plants to ensure zero discharge and the commissioning is under way in another 20 units. With the opening of quota-free textile market, production capacity in all other sectors, including knitting, and finishing, have been increased manifold. But the processing sector has not increased its capacity.

There is a tremendous growth expected in this sector in the coming years.

N. Kandasamy, President of the Dyers' Association of Tirupur, said this was time technology was upgraded. "It is a welcoming trend that the governments and policymakers started realising the importance of the dyeing industry. The industry is the backbone of the entire textile industry and it would die without the dyeing sector," he said.

"Though we need more capital subsidy and grant to adhere to Pollution Control Board norms by ensuring zero discharge, we welcome the sops. Definitely it would embolden us to avail of loans and go in for technology upgradation, says Mr. Kandasamy.

The Tamil Nadu Pollution Control Board had been urging the units to ensure zero discharge he pointed out and said the Board should give no objection certificate to those who were switching to "Soft Flow" from winch machines as an interim measure.

The Tirupur Exporters' Association President, A. Sakthivel, urged the Centre to grant 5 per cent interest incentive and 15 per cent capital subsidy for all sectors under the TUFS. "Almost all major exporters have their own processing units. Provision of capital subsidy and interest incentive would increase the off-take of the scheme. He said the six months timeframe given for completion of processing projects for availing of subsidy was inadequate as it was impossible to complete any major technology upgradation project in processing within six months.

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