The textile industry has sought the continuation of the recently-suspended Technology Upgradation Fund Scheme (TUFS) till the end of the XII Plan.

Southern India Mills' Association chairman J. Thulasidharan said the scheme should be continued without any modification till the end of the XI Plan and extended to the next plan too. About Rs. 8,000 crore was disbursed as assistance under the scheme during the last three years and another Rs. 9,000 crore was the estimated fund requirement for the remaining period of the Eleventh Plan.

Though the scheme took off in 1999, it gained momentum only in 2005 and nearly 90 per cent of investments in the textile sector were now made under the scheme. Textile sector was one of the largest employment generators in the country. The TUFS encouraged investment and, thereby, creation of more jobs.

China currently had about 100 million spindles as against India's 42 million. India was exporting nearly 70 lakh bales of cotton and this cotton could be used in the domestic market by creating more production capacity. “We need further growth in the textile value chain and the spinning sector is capital intensive. Hence, benefits should be continued under the scheme,” he pointed out.

The garment segment in Tirupur has said that more machinery should be brought under the scheme and the assistance given to the processing and garment sectors under the TUFS should be increased.

According to the Powerloom Development and Export Promotion Council, of the total disbursement of nearly Rs. 74,000 crore under the scheme so far, the small-scale powerloom units had used just 1.5 per cent. The country had only 1.03 lakh shuttleless looms and about 22.5 lakh powerlooms. Hence, investments in the powerloom sector should be encouraged. Contribution by project promoters should be brought down to 10 per cent from the existing 15 per cent in the scheme. The interest subsidy should be increased to eight per cent and the capital ceiling should be hiked to Rs. 5 crore from the current Rs. 2 crore.

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