Textiles ministry seeks Rs 1,000 crore more

The textiles ministry has sought an additional allocation of Rs 1,000 crore for the remaining two years of the Tenth Five Year Plan. The money will be used to restructure its existing schemes pertaining to technology upgrade and infrastructure creation, such as the apparel park scheme and the Technology Mission on Cotton.

In its presentation to Prime Minister Manmohan Singh on Tuesday, the textiles ministry said the landmark announcements in last year's Budget, including the one on a level-playing field for all segments, had come five years too late.

The ministry has also prepared a 12-point milestone agenda for the next calendar year, which includes attaining exports of 20 lakh bales of cotton and expanding the scope of the Technology Upgrade Fund Scheme (TUFS) to cover small-scale units, powerloom and processing.

Officials said the milestones had been prepared keeping in mind the increased competition under the quota-free regime from January next year.

Ministry officials told Business Standard that a note for the Cabinet for effecting changes in TUFS, including hiking the subsidy from 5 per cent to 8 per cent would be finalised soon. The ministry would require an additional Rs 300 crore for the revised scheme.

The remaining Rs 700 crore would be used to restructure the apparel park scheme, the Technology Mission on Cotton and the textile cluster infrastructure development scheme, officials said.

The apparel park scheme is being refined to make it equity-based from the present subsidiary structure.

Some of the other milestones of the ministry include abolition of the textiles committee cess in next year's Budget, change in the fiscal duty structure for synthetic yarn and reduction in Customs duty for the remaining textile machinery to 5 per cent.

The milestones of the ministry also include removing raw cotton, cotton yarn and textiles from the Essential Commodities list and framing a comprehensive legislation to protect consumers.

The ministry is also working towards removing knitwear items from the small-scale reservation list and installing 5,000 shuttleless looms by November next year.

The ministry's Vision 2010 document has envisaged an investment of Rs 1,40,000 crore in the post-quota regime. Already, several textiles units like Arvind Mills, Welspun India, Raymond, Vardhaman Spinning Mills and Mahavir Spinning Mills have finalised their capital expenditure for the next few years in preparation for the quota-free regime.

Preparing for life after quota

• Textiles ministry has sought Rs 1,000 crore more to restructure existing schemes pertaining to technology upgrade and infrastructure creation
• A 12-point milestone agenda has been readied for next year. It includes attaining exports of 20 lakh bales of cotton and expanding the scope of Technology Upgrade Fund Scheme
• The milestones have been prepared keeping in mind the increased competition under the quota-free regime from January next year