The Government has provided Technology Upgradation Fund (TUFS) to the Textile Industry with a view to modernize the industry. This was an excellent step towards improving the performance of the domestic textile industry. Though the Scheme was in operation from April 1999, the Textile Industry started availing the facility significantly after 2002. This obviously helped the Textile Engineering Industry (TEI) as more orders were received. This also prompted the (TEI) to increase the capacity.
Further, the Government gave special subsidy for Hi-Tech processing machinery. This resulted in development of some such machinery in the country because second hand processing machinery is not allowed under TUFS as in case of Spinning Machinery.
Since organized mills sector did not have enough loomage capacity and the weaving capacity was largely in the decentralized sector (2.0 million approx), the same never had the momentum for modernization.
The Textile Industry, in general, in earlier years and the decentralized sector in particular, always preferred cheap used vintage machinery from abroad. The low level of technology was encouraged by the Government particularly in the weaving sector even under the TUFS. Cheaper import from China is also preferred.
The Author is Secretary, Textile Machinery Manufacturers Association (India)