Textile ministry to seek more funds for TUFS

After suspending the textile modernisation subsidy scheme for want of funds, the textiles ministry will soon approach the Cabinet Committee on Economic Affairs (CCEA) seeking additional resources for it.

The government had last month asked banks to suspend new sanctions under the technology upgradation fund scheme (TUFS) till new fund allocation is approved by the CCEA. The scheme has been kept under suspension as Rs 8,000 crore subsidy earmarked under the 11th Plan has already been disbursed.

"We want it (TUFS) to be expanded. We will be going to the Cabinet (CCEA) within three weeks," textile secretary Rita Menon told PTI.

While banks and financial institutions have disbursed loans worth Rs 73,168 crore since TUFS began in 1999, the government subsidised 5 per cent of interest reimbursements.

The $63-billion textiles industry has been demanding continuation of the scheme as the freeze would adversely impact their investment and modernisation plans.

"I believe that at least Rs 5,000-6,000 crore is required for the remaining two years of the Plan period," Confederation of Indian Textile Industry secretary-general DK Nair said.

The ministry said segments like spinning, cotton ginning and pressing, garments and weaving are among those who have taken benefit of the scheme.

The domestic textiles industry, which employs about 35 million, requires constant modernisation of its plant and machinery to compete with China in global markets.