The suspension is only a temporary measure, says Textiles Secretary Rita Menon

Sanction of projects under the Technology Upgradation Fund Scheme (TUFS) has been suspended as additional fund allocation is needed for the scheme for the XI Plan. The Union Ministry of Textiles has issued a circular in this regard on June 30. Textiles Secretary Rita Menon told The Hindu that the allocation for the scheme for the XI Plan was Rs. 8,000 crore. The interest compensation payment under the scheme was cleared till January 1, 2010. However, payments were pending for the last quarter of 2009-10 and the first quarter of this financial year. The additional amount needed was expected to be finalised by next week. “The suspension is only a temporary measure,” she said. The Ministry of Textiles was also trying to make the scheme more meaningful for specific sectors in the value addition chain such as the powerloom and processing.

Chairman of the Southern India Mills' Association J. Thulasidharan said “We are optimistic that the Ministry of Textiles will get the necessary additional allocation.” The scheme should be continued for the XII Plan too as the textile industry, especially sectors such as spinning, was capital-intensive. Investments were relatively low during the last two years due to the global economic slowdown and the industry had just started reviving. Investments in modernisation and new capacities were just taking off and the sanctions should be resumed at the earliest, he said.

President of the Tirupur Exporters' Association A. Sakthivel has said in a release that some garment exporters had submitted proposals to banks for further investment and many were considering modernisation and increase in capacity. New sanctions under the scheme should be resumed immediately so that projects in the pipeline were not affected, he said.

More In: Industry | Business