Increase TUFS allocation to help textiles sector: Assocham

Industry body Assocham has asked the government to increase allocation under the Technology Upgradation Fund Scheme (TUFS) for textile firms to up to Rs 4,500 crore to help the sector return to growth.

"The textiles sector requires modernisation and new technology. The government should further increase funds under TUFS for textile firms from Rs 3,140 crore to Rs 4,500 crore," the chamber said.

The government had given Rs 2,632 crore under TUFS in 2008-09 and has earmarked Rs 606.62 crore for this fiscal.

Assocham said though the economy has begun to come out of the slowdown and sectors like the cement and steel are showing signs of recovery, the textiles sector is yet to record any indication of recovery.

Textile exports in 2008-09 registered a decline of 1.71 per cent from $22.13 billion in the previous fiscal to $21.75 billion. The  handicrafts segment registered maximum decline of 48.35 per cent in 2008-09.

It further said the sector witnessed an increase of 50 per cent in investment during 2008-09 to Rs 49,613 crore from Rs 31,161 crore in 2007-08.

Assocham further said that the government should create an investment friendly environment by providing low interest loans to investors and that export profits be made tax-free during the slowdown.