The Indian Textile Industry has an overwhelming presence in
the economic life of the country. Apart from providing one of the basic
necessities of life, the textile industry also plays a pivotal role through its
contribution to industrial output, employment generation, and the export
earnings of the country. Currently, it contributes about 14 percent to
industrial production, 4 percent to the GDP, and 17 percent to the countrys
export earnings. It provides direct employment to about 35 million people,
which includes a substantial number of SC/ST, and women. The Textile sector is
the second largest provider of employment after agriculture. Thus, the growth
and all round development of this industry has a direct bearing on the
improvement of the economy of the nation. The Indian textile industry is
extremely varied, with the hand-spun and hand woven sector at one end of the
spectrum, and the capital intensive, sophisticated mill sector at the other.
The decentralized power loom/ hosiery and knitting sectors form the largest
section of the Textile Sector. The close linkage of the Industry to agriculture
and the ancient culture and traditions of the country make the Indian textile
sector unique in comparison with the textile industry of other countries. This
also provides the industry with the capacity to produce a variety of products
suitable to the different market segments, both within and outside the country.
The major sectors forming part of the textile industry
include the organized Cotton/Man-Made Fibre Textile Mill Industry, Wool and
Woolen Textile Industry, Sericulture and Silk Textile Industry, Handloom
Industry, Handicraft Industry, Jute and Jute Textile Industry, and Textile
Exports. The Ministry of Textiles is implementing various schemes for the
holistic growth and development of the sector.
The Indian Textile Industry has suffered from severe
technology obsolescence and lack of economies of scale, which in turn diluted
its productivity, quality and cost effectiveness, despite distinctive
advantages in raw material, knowledge base, and skilled human resources. While
the relatively high cost of state-of-the-art technology and structural
anomalies in the industry have been major contributory factors, perhaps the
single most important factor inhibiting technology upgradation has been the
high cost of capital, especially for an industry that is squeezed for margins.
Given the significance of this industry to the overall health of the Indian
economy, its employment potential and the huge backlog of technology
upgradation, it has been felt that in order to sustain and improve its
competitiveness and overall long term viability, it is essential that the
textile industry has access to timely and adequate capital, at internationally
comparable rates of interest in order to upgrade the level of its technology.
In the light of above, the Technology Upgradation Fund
Scheme was launched on 01.04.1999 for a period of five years, which has been
subsequently extended till 31.03.2007, the terminal year of the Xth plan.
TUF Scheme will be continued during the eleventh plan
against a provision of Rs.535 Crore in 2006-2007. Rs.911 crore would be
provided under TUF Scheme in 2007-2008. As before handlooms will be covered
under the TUF Scheme. The extension of TUF, a central scheme offers 5% interest
subsidy to textile companies on expansion spree, has been high on the wish list
of the industry. It wants more incentives for
investment as it aims to double its global market to 10% by 2010. For this,
investments worth Rs. 100,000 crore are required. The Union Budget 2007-08 has
been positive for the textile sector.
TUF Scheme will be continued during the eleventh
plan against a provision of Rs. 535 Crore in 2006-07. Rs. 911 Crore would be
provided under TUF scheme in 2007-08.
As before handlooms will be covered under the TUF scheme.
Allocation under this scheme for the next year has been increased which should
expedite the release of the subsidy.
The Textile Ministry recently decided to extend
the Technology Upgradation Fund (TUF) scheme to boost the textile industry.
The industry has begged the extension of the 10% upfront capital subsidy for
specified textile processing machinery by another year. The subsidy is
additional to the interest subsidy of 5% under the TUF for specified textile
processing machinery and the implementation period for the scheme is one year.
Which will end on April 19, 2006.Under the scheme, the government has yet
sanctioned 4,047 applications worth Rs 12,758 crore for expansion projects
worth Rs 28,628 crore. The largest number of applications for funding has come
from Gujarat (1,214).Tamilnadu got around 1,174 applications and Maharashtra 317.