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Country will become Clothier to the World with TUFS, NITMA
Aug '10
The Ministry of Textiles had introduced the Technology Up-gradation Fund Scheme (TUFS) in 1999 to initiate investments in the beleagured textile industry. TUFS was to last till 2007, but the government had extended the scheme till 2012, end of the 11th Five year plan.

From 29th June'10, the government suddenly discontinued this scheme and banks have been told to not clear any further investments under this scheme. “The sudden suspension of the TUF Scheme has come as a shock to the entire Textile industry and all further investments in the Textile Industry has come to a halt”, said Shri Ashish Bagrodia, President, Northern India Textile Mills Association (NITMA).

“Even the funds allocated in the budget 2010-11 have not been completely released to the industry and the industry has received funds only till December 2009”, Shri Ashish Bagrodia added.

The TUF scheme since its inception in 1999 has been one of the most successful schemes of the Government of India which has brought in an investment of Rs.2,07,350 Crores in the Textile sector and has created huge employment for the unskilled and unemployed of our country through the entire textile value chain from Ginning to Garmenting. The Indian textile industry is the largest employer in the country after agriculture.

These investments have also helped the Indian farmers with the local industry consuming 250 lakh bales of cotton out of the 295 lakh bales produced in the country during 2009-10 season who otherwise would have been at the mercy of the traders/exporters. Cotton consumption in our country has increased from 160 lakh bales in 1999. Today, our country is the world's second largest producer of cotton with largest acreage in the world under cotton cultivation.

The country is expected to produce a record crop of 320-325 lakh bales in the coming season 2010-11. If further investments in this sector remain suspended due to suspension of TUFS, then the cotton farmers of our country will have no other option but to remain at the mercy of the traders. Our country's precious raw material will have to be exported to our competing countries.

It is important that the TUF Scheme is immediately restored so that value addition in done within our country giving an opportunity to lakhs for employment. On one hand the government is allocating thousands of crores to the NREGA scheme and on the other hand the same government is finding it difficult to allocate funds for this scheme where the industry itself can create huge employment and reduce the burden on the government.

The success of this scheme can also be judged from the fact that there has been no default by the Textile industry on loans taken from banks under the TUF Scheme. It is very important that the momentum on investments in this industry is not lost. The Government has envisaged that cotton production will reach 483 lakh bales and an additional investment of Rs.1, 76,510 crores in the textile industry will be required till 2020. None of this will happen without TUFS. Many textile companies are awaiting the clearance of this scheme to modernize their factories.

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