The Southern India Mills’ Association (SIMA) has appealed to the Union Ministry of Textiles to announce the details of the Technology Upgradation Fund Scheme (TUFS) immediately to enable the textile industry to go ahead with the planned investments.
Association chairman S. Dinakaran has said in a release that the scheme, since its launch, has attracted over Rs. 2.3 lakh crore investment in the textile industry for green field projects (capacity building) and modernisation. It offered five per cent interest subsidy and 10 per cent capital subsidy for certain textile machines in weaving, processing and technical textile segments.
Investments were dormant during the last two years owing to recession in the industry.
However, with signs of revival now, the industry was ready to make investments again.
The scheme should be announced soon so that the units would be able to go in for modernisation and capacity expansion.
The Ministry should also provide subsidy under the scheme for loans sanctioned between June 29, 2010 and April 27, 2011.
Projects with total investment worth Rs. 23,000 crore were sanctioned then and the benefits of the scheme should be extended to these projects so that they were financially viable, he said.
Though India was the second largest textile player globally, its share in the global textile and clothing trade was less than five per cent.
The share of China was 34 per cent. India had the potential to double exports and expand its business size by upgrading technology.
The government announced that the scheme would be in operation during the XII Five Year Plan period to attract an investment of Rs. 1.51 lakh crore.
It had also allocated Rs. 2,400 crore for the scheme for the current year.
“But, the Ministry is yet to announce the new scheme for the XII Plan,” he said. The industry was now paying 14 per cent interest and hence it was essential to continue the scheme.