Textile cos want TUFS back immediately
CONCERNED about the sharp deceleration in the growth of cotton textiles and textile products in July 2007, the textile industry seeks immediate restoration of the Technology Upgradation Scheme (TUFS) for the textile sector. TUFS, which was started in 1999, was extended beyond March 2007 subject to necessary modifications. The government has decided to keep TUFS in abeyance for sanction of any fresh loans with effect to 1st April 2007 till the finalisation of modifications and issuance of instructions in this regard. It is felt that the allocation of Rs 911 crore under TUFS for 2007-08 is insufficient for meeting the requirement of the textile sector. This allocation has to be minimum of Rs 2,000 crore for the current year. It is noted that in July 2007-08, cotton textiles grew by only 5.1% compared to 14.3% in July 2006-07. Textile products witnessed a growth rate of meager 3.6% in July ‘07-08 vis-à-vis 28% in ‘06-07. Average growth rate of cotton textiles for the first 4 months (April-July) of 2007-08 was 6.9% vis-à-vis 12% in 2006-07. In the coming months, it is felt that the impact of a rising rupee and absence of benefits under TUFS could further decelerate the growth of the sector. “The government should release the pending subsidies. Proposed investment by the government under TUFS was close to Rs 25,000,” says Mr Dinesh Lakra, Chairman, All India Laghu Udyog Bharti Textile. During the period April-February 2006-07, 3,539 applications were sanctioned under TUFS having a project cost of Rs 35,651 crore, whereas in April-February 2005-06 there were 688 applications sanctioned having a project cost of Rs 10,719 crore. Under TUFS, it is observed that from April-February 2006-07, total number of applications sanctioned increased by 414% i.e. from 688 to 3,539 applications.