Industry welcomes TUF extension

After the recent floods and the week-long transporters' strike, which caused heavy losses to the textile industry, the local business fraternity finally has something to cheer about.

The Union textiles ministry has extended the date of closure of the Technology Upgradation Fund Scheme (TUFS) to up to March 31, 2007.

The scheme was introduced by the ministry on April 1, 1999 for a period of five years, with an objective to provide term loan assistance at competitive rates to facilitate upgradation and modernisation of the textile industry.

"It is a very good decision by the Central government. The TUF scheme will help in machinery modernisation. This is vital in the wake of the challenges that lie in store for the textile industry in the coming years," said Dinesh Mandalaywala, president, The Southern Gujarat Chamber of Commerce & Industry.

"At the same time, I would like to say that it takes three-four months now for reimbursement of the subsidy amount. I request the government to see that the procedure is expedited and subsidy is paid to the industrialists within a month," Mandalaywala added.

"It is a very positive decision and has come at a very right time. The TUF scheme is five years old, but so far only bigger industries have been able to avail any benefit - the smaller sector has remained largely untouched. Only 3 to 4 per cent of the small scale units have been able to secure benefits of TUFS, while over 95 per cent are lagging behind in machinery upgradation," said Girish Luthra, director, Luthra Group.

"The textile industry is expected to grow at a faster rate, while India is supposed to become the preferred textile supplier after China. If this has to be achieved, it is extremely crucial that more and more small & medium scale textile units upgrade their machinery. The decision to extend TUFS, will come as a direct help for the industry," Luthra added.

"In my opinion the scheme should be extended till 2010, as this will give ample time to the industry for machinery modernisation."

Federation of Gujarat Weavers Association Manu Patel, too welcomed the decision.

"Due to lack of awareness, very few weavers in Surat have availed facility of TUF scheme so far. However, the industry has not started realising the benefits of the scheme. Now that the government has extended the scheme till 2007, I am sure more number of weavers will opt for the scheme, which would prove extremely beneficial in the long run," Patel said.

Pramod Chaudhary, director, Pratibha Group, said: "The scheme was introduced to push the textile industry towards modernisation and ready it to face the challenges in the post-WTO regime."