Measures to boost textile sector

In a bid to give a leg-up to the textiles industry in the post-quota regime, government today rolled out a slew of measures for the sector, including a 10% capital subsidy scheme, de-reservation of 30 items from SSI and reduction in duty on machiery and yarns.

Reaffirming government's commitment to the sector, finance minister P Chidambaram said, "Government will continue to nurture the textile sector which has huge potential for employment and exports".

Tabling the Union Budget for 2005-06, he said the sector was witnesing a new vigour after the quotas were elimiated on January 1, 2005, and investment was estimated to go up to Rs 30,000 crore from Rs 20,000 crore in 2004-05.

Besides raising the allocation of technology upgradation fund by Rs 435 crore, he announced a 10% capital subsidy scheme of 10% for textile processing sector. This is in addition to normal benefits under TUF scheme.

In order to help the industry acquire a competitive edge, customs duty on textile machinery is being proposed to be halved from the earlier 20% and 30 textiles items, including hosiery, are being dereserved from the small scale list.